Can't Pay Your Insurance Premium? Here are four solutions

Feb 26, 2018

Emergencies come up, sometimes causing a harder financial situation. Earlier, we’ve looked at reasons why you must never skip your insurance premium payment. But what if you are not able to pay your premium on time? Well, the worst thing you can do is to do nothing. Here are several solutions that you can do instead:

1. Check your insurance policy for any grace periods:

Most insurance policies have a short period of time during which you’re still covered even if you haven’t paid. This amount of time is a grace period and can vary from 15 to 30 days. So, it might be worth your while to check your policy and correspondence from your insurance provider and see if you can make the payment before the grace period and save your policy from being terminated for non-payment.

 

2. Switch from an annual plan to a monthly plan

If your insurance premium is paid annually, it will likely be a tidy sum. So if you’re having a problem paying it all at once, it might be a good idea for you to switch to a monthly payment plan. This way, you would be dividing the annual premium on 10 to12 months instead of paying it all at once. Yes, you will very likely end up paying more in total than you used to pay annually because finance fee charges which are never higher than 3%. But you might find paying monthly more manageable and easier to plan. Plus, switching from an annual plan to a monthly one could help relieve some of the immediate financial tension. Monthly payments are preauthorized, so you could skip the hassle of making the payment yourself every month and not worry about paying on time. Most insurance companies even allow you to choose the date the payment is withdrawn on. Another option is to stay on the annual plan but choose to pay in 2 to 4 installments. These installments can be paid by credit card, via online banking, or at the insurance company’s website.

 

3. Talk to your broker and see what they can do

Talking to your broker is always a good idea, especially in this case as they might have more options for your payment issue. Your broker could be able to contact the insurance company and come up with an arrangement of combined payments or installments. The fact is brokers will always help you to the best of their ability to make sure your policy does not lapse and that you are covered at all times.

 

4. Be proactive

Don’t wait until the problem happens and plan in advance. Only 47% of Canadians use a budget to plan their spending (according to UCC). Allocating a budget to each expenditure and keeping in mind larger payments and their billing dates can help you stay in the black throughout the year. You can download a budget Excel file online and fill it up online with your expenses on a monthly basis, or you can set up an account at your bank and transfer funds to it every month to have the entire amount you need annually. Another option is to download one of the budgeting apps available on the App Store and Google Play. These apps will help you track and categorize every payment you make and ensure you’re staying within your budget. There is a wide variety of free and paid apps available. Read reviews and try each app for a while to see which one best suits your needs, especially before committing to a paid app.

 

Contact us today to learn more about your insurance options!

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