Blog: annual or fractional payment?

I’m sure you’ve already asked yourself this question when you took out insurance. As you finalized the terms of a car, home, or any other insurance policy, you had to decide how you wanted the insurance amount to be paid. Basically, what you did was choose between an annual payment or a monthly, quarterly or semi-annual payment. An option that you notice when you pay for insurance.

Is the insurance price decision over time the best one for you? We will answer your questions and show you the implications of each alternative.

How does insurance price splitting work?

The Generali Tranquilidade insurance glossary is your second best friend to understand all the terms related to this activity. Which is first? Your mediator. According to the glossary, splitting is the «payment of the annual contractual premium in monthly, quarterly or semi-annual instalments». When you opt for splitting, you will agree with the Insurance Company to pay an annual amount in periodic installments, thus dividing the price of the insurance.

The advantages of paying annually

The difference between paying for an insurance policy in a lump sum or in installments is not just a matter of language.

> Guarantees protection against forgetting

Imagine that you have multi-risk insurance for your home and that you have decided to split the price of the insurance with a quarterly instalment. He paid the first receipt, but then didn’t pay the second. However, a flood occurred in the second quarter of the policy and caused extensive damage. The insurance company does not accept your request. Why? Because the policy is canceled due to non-payment.

> Avoid splitting costs

Opting for the annual insurance payment, in addition to freeing you from these worries, has other advantages. The possibility of splitting the payment of the value of an insurance policy is usually subject to a fee. By paying the annual price of the insurance you will avoid sharing the costs.

The ideal solution is up to you

After analyzing the advantages and disadvantages of each scenario, it is time to choose the alternative that best suits your interests.

Keep in mind, however, that not all insurance policies allow this division. Personal accident insurance may have annual values ​​so low that they justify an annual payment. On the other hand, auto insurance, especially if it includes personal injury coverage, may justify payment sharing.

Before making a decision, use the simulators at your disposal or consult a mediator to understand which solution is ideal for you. There are always ways to offset any additional costs. Whichever option you choose, always remember the benefits of taking out direct debit. If you do this, you don’t have to worry about the payment date or going somewhere to do it. Furthermore, it is a safe option and does not incur any additional costs.

And did you know that, with Generali Tranquilidade, if you are a Green Customer and agree to receive the documentation via email, you will be exempt from the cost of the policy? In addition to saving the environment, you will also save your wallet.

There is always time for change

Taking out insurance is a dynamic process. Life changes and so do your needs. Therefore, it is important to adapt the level of protection and coverage of any insurance policy. Your method of paying the insurance price is no exception.

To change the payment frequency of a policy, provided that the conditions allow it, simply request it in writing. In addition to identifying the type of installment desired, the contractor will have to sign the declaration and send it 30 days before the amount to be paid expires.

If you still have questions, the best way to clarify them is to contact one of Generali Tranquilidade’s mediators or visit one of our stores. Expert advice will help you in the decision-making process and ensure that orders are placed in an exemplary manner.