How do You want to Pay your Life Insurance Premium?
Did you know life insurance can be paid for in different ways? You can choose to pay however best fits your own budget. My, how things have changed though! Did you know not too long ago, life insurance agents not only would come to your house to discuss your needs, but they would also stop by to pick up your premium payments – sometimes weekly! Talk about personal service.
As I think about how nice that must have been, I can’t imagine that occurring today. It’s not uncommon still for an agent to visit your house, but it is no longer necessary. Most life insurance these days can be purchased online or over the phone. You can even get a policy in the bank branch at your local grocery store! And now, it’s just as convenient to make your payments too.
As you look into purchasing insurance you may hear mention of the terms: mode, bank draft or direct bill. Basically, they are different methods for making your payments. Bank draft and direct bill are options available for receiving notifications that premium payments are due. Direct bill means you will get an actual notice in the mail as a reminder. Many times there is a payment coupon included in the notice and you return that along with your premium payment (typically a check). Bank draft means you have given the insurance company permission to debit the premium amount directly from your bank account. This occurs automatically, depending on the frequency you have chosen to make payments.
The frequency you elect to make payments is the mode. In most cases, insurance carriers offer you the freedom of making payments monthly, quarterly, semi-annually (twice per year) or annually. This allows you to choose when you want to make payments that best fits your budget. Keep in mind that some modes actually cost more than others – usually monthly costs a little more than annual. And, sorry, weekly pick up at your house by your agent is no longer available.
About the author: Seth Gowdy is the Sales Manager for Pivot Insurance and holds multiple insurance and securities licenses. He has been part of the financial services industry for nearly 20 years. In his free time he enjoys being outdoors fishing, hiking, and geocaching with his wife and two children. Seth most enjoys helping clients with Pivot’s anonymous life insurance quote process and needs calculators. You can reach Seth at 1-800-651-1953 or SGowdy@pivot.com.