Insurance Policy: Monthly vs Annual Payments

Your insurance company will provide coverage and protection for whatever you put under their care as long as you do not default in your premium payment. There is usually an agreed amount to be paid as premium. This amount is agreed between you and the insurer. Depending on the amount of coverage to be offered, premium rates vary from one person to another.

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Insurance companies always give the option of a monthly payment plan or an annually payment plan. The monthly payment plan is designed to cater for individuals or businesses that cannot afford to pay a onetime premium fee. The way these monthly plans are designed, they often look like little installment payments that wouldn’t break the bank

Accumulatively, you would realize you would end up paying more at the end of the year than someone that opted for an annual payment plan. This is in no way designed to discourage you from monthly payment plans. It is best you fully understand and strategize on which plan would be best for you. Some insurers charge interest on monthly plans. Take time out to calculate how much you can save if you opt for an annual payment plan. For small businesses, you would observe that this savings will go a long way to help the business.

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