What is the periodicity of premium payments?
Most general insurance policies are annual and the premium payment is in advance. No risk commences unless you have paid the premium. In some long term policies companies have the facility of collecting premiums periodically. Why do different people have different premiums ? The premium is calculated on the extent and nature of the cover you want. A higher sum insured means a higher rate of premium. Similarly a higher risk will be charged a higher premium. An example of this is that an older person will have to pay a higher premium for health insurance for the same sum insured. Sometimes the risk is higher depending on the location of risks for example in motor insurance in areas where accidents are higher. So the premium will vary according to the nature and severity of the risk. If I buy a policy and dont make a claim, it is a loss. So, why should I buy insurance? General insurance is not meant to be for savings or investment returns. It is meant for protection. What you pay for is t
Related Questions
- I want to set up a life insurance policy, name Williams College as beneficiary, but retain ownership of the policy. Can I deduct the premium payments I make?
- In some instances where Anthem provides COBRA administrative services for a plan, does Anthem accept COBRA premium payments? If yes, from whom?
- What is the periodicity of premium payments?
