For the majority of policyholders, it is very important to formulate a reasonable insurance plan. In addition to choosing the right protection, it is also necessary to have a reasonable payment plan.
After all, the overall premium of insurance is not low, and it needs to be paid by the policyholder for a long time. If the payment method is not reasonable, it is easy to cause trouble. Therefore, it is more cost-effective for everyone to figure out how to pay their premiums.
Here, Wutong Jun will introduce the relevant methods to help you make a reasonable choice.
There are two ways to pay premiums, one is single payment and the other is regular payment.
Single payment means that all premiums are paid in one lump sum at the time of application. The advantages of single premium payment are convenient operation, short payment time, small total premium, and no need to worry about overdue payment, but there are also many disadvantages of single premium, such as large one-time payment amount, weak leverage, and inability to trigger premium waiver.
Periodical payment means that the premium is paid in installments at certain intervals when applying for insurance. For example, the policyholder can pay the premium in 20 or 30 years, or until the age of 60 or 70. In addition, policyholders can pay premiums on a monthly, quarterly, or annual basis.
The advantages of regular premium payment are that there is less pressure to pay premiums, premium waiver protection, and more leverage. The disadvantage of paying premiums on time is that it is more cumbersome, and you need to pay the premiums in full and on time into the designated account.
When formulating an insurance plan, you can make a decision based on the type of insurance product.
Generally speaking, critical illness insurance and term life insurance are protection insurance, and it is better to use the method of regular premium payment, which can better use the principle of insurance leverage.
For example, the policyholder pays a premium of 3,000 yuan per year to buy a critical illness insurance with an insurance amount of 500,000 yuan. After paying the premium of 3,000 yuan in the first policy year, if you suffer from a critical illness as agreed in the insurance contract, you can receive a one-time compensation of 500,000 yuan from the insurance company.
In other words, the policyholder only spent 3,000 yuan and received 500,000 yuan in compensation, fully benefiting from the leverage of insurance. If you pay the premium in one lump sum, there is not much point in buying insurance.
Annuity insurance and increased whole life insurance are wealth management insurance, and shortening the payment period will be more beneficial to the policyholder. If you can afford it, it is better to pay the premium in a single way.
After the policyholder pays the premium as soon as possible, he can better enjoy the compound interest income brought by annuity insurance and increased whole life insurance.
Regarding the payment after insurance, the policyholder should know three deadlines:
1. Grace period
The grace period refers to the period in which the policyholder is unable to pay the premium in full and on time, and the insurance company will give 60 days to wait for the policyholder to make up the premium. During the grace period, the policy continues to be in force, and the insured can be compensated normally after the accident.
2. Reinstatement period
The reinstatement period is also called the suspension period, and the time is generally 2 years. If the policyholder fails to pay the premium within the grace period, the policy will enter the reinstatement period and lose its protection effect. During the reinstatement period, the policyholder can apply to the insurance company to restore the protection effect of the policy.
3. Termination Period
If the policyholder still does not apply for reinstatement before the end of the reinstatement period, the insurance contract will enter the termination period and the policy will be completely invalidated.
Through the above content, I have given you a more cost-effective introduction to how to buy insurance. In general, you should choose the appropriate payment method based on your actual situation.