Should You Pay Your Insurance Monthly or Annually?

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The question comes to me often. Should you pay your insurance premiums annually or more frequently, such as monthly?

With many companies, there is a significant premium difference - 5 to 10% in some cases - between the annual premium and the total of 12 months of monthly premium. Companies do this due to increased service costs of handling monthly checks and due to the fact that they can't use all of your money to invest in their general account. They have to wait for you to pay each month.

However some companies now offer very little cost difference between an annual premium and a monthly premium paid automatically via electronic funds transfer ("EFT"). In this case going monthly would be fine.

Either way, I like the 80/20 time saving idea of setting it on auto pilot - auto monthly, or auto annually (or quarterly etc) however you decide to pay.

And I like the 80/20 money saving idea of paying 5-10% less on your premium especially since, unlike the 1980s, you're not going to earn more than that in the bank.

Side note - this was often also the reason people chose not to escrow their property taxes and home owners insurance because they got earn more if their money were in their bank account earning interest - in the 80s! not anymore.

If you liked the video let me know and if you want to see other topics discussed, share them in the comments section.

Thanks for watching.
Remember to 80/20 Your Money (and your entire life!)

Warmly,

Chris Grande
Belmont, MA and Marin County, CA

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Note:

My articles and videos are meant to be educational and not specific advice. I assume my readers are big boys/girls and understand that, but in today’s climate I have to tell everyone again anyways – people might do something dumb and go hurt themselves! (like stick a fork in an electric socket or something – don’t do that!). Consult a qualified advisor before attempting financial strategies that you don't fully understand.