Different forms of payment in insurance

Most insurers offer fractional premium payment options among their facilities to avoid having to make a large outlay at once.

Duration of insurance and installment payment

Even if this is the case, keep in mind that making the installment payment does not imply that a fractional insurance is contracted .

The duration of the contract is usually annual, so all the installments must be paid while the insurance lasts or while the desire to cancel it is not communicated as established in the conditions.

Both the annual payment and the installment offer different advantages and disadvantages . Keep reading to know them.

Annual insurance payment

There are insurances that have traditionally been paid annually, but this has changed and even in the case of car insurance, a payment in installments or installments can already be made.

Advantages of the annual payment:

• It is usually cheaper to pay at once .
• You only have that expense once a year, so in terms of organization it is easier to be prepared.

Disadvantages of the annual payment:

• You must have the entire money available , and there are times when this can be complicated by personal circumstances.

Fractional payment of insurance

Advantages of split payment

Paying insurance little by little is easy and this is its greatest advantage, but the conditions established by the insurer must be met to qualify for the payment of the fractional premium.

In addition, sometimes in the most basic insurance it is not possible to enjoy this option , since one of the conditions may be the annual payment if a certain minimum amount is not reached.

Disadvantages of the installment payment of the insurance:

• It usually carries a surcharge , and therefore the premium is higher.
• In many companies, not all fees are equal , some are higher than others.
• If there is a claim , the insurer can claim the unpaid premiums .

The most common installment payments in insurance

• Semi-annual payment . Making a payment in two times can facilitate the disbursement and does not usually have a lot of surcharge. This is useful in higher insurance such as auto insurance, civil liability insurance , deaths of a family, …
• Quarterly or quarterly payment . It is done every 3 or 4 months, and usually dividing the payment in more than 3 months carries a surcharge.
• Monthly payment . It is common for health insurance to have a monthly payment method, although it also exists in the case of insurance with high annual premiums.
• Single payment . The single payment is normally associated with funeral insurance . There is the option for people over a certain age (usually 65-70 years) to make a single payment and leave all matters related to the death settled so that no one has to worry about it.

As always, check the conditions carefully when choosing insurance.