Periodic contribution payments are usual, which are usually made monthly, quarterly or semi-annually. In addition, for certain types of insurance (e.g. private pension insurance), the one-off payment is also common.
Influence of the payment method on the amount of the insurance premium
If shorter periods are selected for the regular payment of the insurance premium, the premiums may be higher due to the surcharge during the year. This is intended to compensate for the higher administrative costs associated with the increasing number of payment transactions. In this respect, the individual payments are also seen as installment payments in relation to the total amount due at the beginning of the marketing year. In addition, the lower interest income should also be offset.
Material start of insurance
In the case of premiums to be paid periodically, the first time the insurance premium is paid after the contract has been concluded is of particular importance, since insurance coverage begins from this point in time (receipt of payment by the insurer).
Should it happen that this amount is not paid on time, the insurer is allowed to withdraw from the contract. As a result, the insurance coverage will also expire retrospectively.
If a subsequent premium is not paid on time and reminders remain without results, the insurer can also terminate the insurance contract here.
Gross and net contribution
A distinction is made between gross and net premiums, particularly for life insurance. The gross contribution includes all calculated surcharges.
If these are deducted, the part that is intended to cover the insurance benefits remains. From this, for example, the sum insured in the case of capital-forming life insurance policies is formed over the term . In addition to the contractually determined contribution, a fixed unit cost surcharge and instalment surcharges may arise, which result from the payment mentioned above in short periods.
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