KISS.
If a customer cancels their account they have access to the end of the rebill cycle. This is what 99% of them will expect (they've already paid after all), and it is more money in the bank for you, it averages out to 1/2 a month of turnover that you throw away on every users retention.
The few users that bitch loudly enough or that have really good reasons to want their money back can always be refunded.
Do a 5 or 10 day trial next to your instant monthly rebill. This will significantly increase the conversion rate for your higher priced product and it will attract a few people that would otherwise not buy in.
Make the monthly one the default, and price the 5 or 10 day trial at half your monthly rate to make it look good.
A/B test your pricing! (see http://jacquesmattheij.com/Double+your+price+%28and+no,+I%27... ) just to make sure you're not leaving money on the table.
Get yourself an IPSP that is in it for the long haul.