When purchasing an insurance policy like auto, home, renters, or health, you will be given the option to pay for your premium in different ways. You can either pay in monthly installments or in full. However, there are many benefits to paying your premium in full. Below are a few of them.
The bills won’t pile up.
You don’t have to bother getting another bill for the next 12 months once your insurance is paid in full. You won’t risk not paying your premium on time, leading to higher premium costs, voiding your coverage, and even damaging your credit score.
You don’t risk a cancellation.
You are not at risk of the insurance company canceling your policy since you won’t be missing a payment. You’re essentially “guaranteed” insurance for 12 months period.
You’ll pay less over the year.
The insurance company offers you a discount for paying in full. You can save on your total costs by paying upfront, even if the insurance company doesn’t offer this discount. Most insurers will charge a monthly interest fee or transaction fee; you will be able to save money when you pay in full.
Your insurance premiums won’t increase for that period.
Your insurer won’t be able to increase your monthly costs if you pay in full, and you’ll get a “locked” rate for 12 months. This is especially useful if you file a claim, as it will help you avoid raising premium costs.
