Yes, if you choose the 5 year plan, you are expected to pay it all up front.

Those plans are designed to give you a price break. The longer the term, the lower the effective monthly rate. The 5 year plan costs $299.00, which figures out to $4.99/month. But if you opted for the monthly payment plan, it will cost you $12.00/month. Over 5 years, that would be $720.00. So when you go with the 5 year plan, you effectively purchasing 25 months of service and getting 35 months free.