Can I Pay my Premium Up Front?
If you are buying short-term health insurance you will usually be given the option of paying a single payment up front or paying a premium each month. Any long-term insurance contracts that have a specified time period where the coverage can be used will also offer these options. Each option has benefits depending on your financial situation and how long you expect to need your policy, so it is worth considering both options before you agree to a set payment schedule in order to avoid a company cancelling health coverage.
Paying a Monthly Premium
If you are unsure how long you will need your medical coverage, because you are hoping to sign up for a new policy, you expect to start receiving benefits from your job or any other reason, then paying a monthly premium can be a wise choice. You do not want to wind up paying for coverage that you wind up unable to use. Monthly payments are also helpful for those who have benefits tied to their monthly paycheck because you can have the cost of your insurance automatically deducted each month so you never have to worry about remembering to pay your bill.
Paying Up Front
If you know exactly how long your insurance contract lasts or how long you will need your coverage, it can be easy to set up a single payment at the beginning of each year. Keep in mind, this payment will not include costs such as co-pay fees or increases in the cost of your coverage. It is also difficult to get a refund of this amount once your contract has gone into effect so you will need to be absolutely sure about what coverage you need before you make an agreement.
Many companies prefer customers that want to pay their premiums up front so including this desire in your application may give you a wider range of coverage to choose from when you start shopping. Proving that you can afford such a large payment all at once will also make you look like a more desirable candidate since that shows you have financial stability. Since it is very difficult to predict what you will use your health insurance for each year, insurance companies like to have the basic cost of their contracts covered in advance so they do not need to worry about losing money on their contracts.
Choosing to pay your premiums in a single payment gives you a lot more wiggle room when it comes to adjusting your contract. You know exactly when your contract expires, so you can speak to your agent about any changes you wish to make or start looking for a new policy before you make your next annual payment. If your coverage has expired you will need to sign onto a new policy quickly and insurance companies will take advantage of this by offering you less competitive rates. But if you have a policy in hand and threaten to take your money elsewhere, you are much more likely to get the changes you are hoping for.
In most cases, paying a premium up front often costs less than paying a monthly fee. You will pay the minimum cost of keeping your policy going and cover other expenses as they arise instead of allowing your insurance company the option of increasing the cost of your coverage if you happen to require more medical care than you previously expected. When paying costs up front, you know if you can expect higher premiums the next year and can decide how to handle it in advance so you are not stuck paying an amount you cannot afford.
What People Are Saying
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