Monthly vs. annual premium payment plans – Is it all the same?
When it comes to insurance coverage, there are many decisions to make about coverage, deductibles, plans, and extras. You’ll also need to decide how and when you’ll pay for this coverage.
Most insurance companies give you the choice of paying for the entire policy at once or spreading the cost through monthly payments. But which is best?
When you pay upfront for an entire year of insurance coverage, you’ll have the advantage of getting that bill out of the year for the entire year. This is extremely helpful for those people whose income fluctuates throughout the year or that works seasonally. In addition, you won’t be bombarded with monthly payment reminders or worse, forget to pay one month and suffer the consequences!
Perhaps the biggest reason to pay your premium in full is that many companies give you a discount for selecting this options. If you save money, it is worth looking into. On the flip side, if you have to empty your savings accounts to pay the premium, it probably isn’t worth it.
Instead of paying for a year’s worth of coverage, the premium can be divided into 12 monthly payments. Be aware that some companies charge an installment fee for this convenience, stemming from the fact that it takes more work on their part to process 12 payments rather than one. It may be a modest fee, but it can quickly add up over a year.
However, this option is ideal for those who live on a tight budget or have limited savings. It may be best for those who expect a major change in their policy before the year is up. For example, a young man who is about to turn 25 can enjoy a lower auto insurance rate after his birthday will want the ability to change the policy to see immediate savings.
If you have any more questions about insurance coverage or premiums, contact Abbate Insurance in New Haven, Connecticut. Give us a call today to get started on your personalized policy with a payment plan to suit your needs and budget!