Everyone knows how to buy insurance, and if they don’t know it, they have bought at least one or two. However, life is such a long road, and there are always difficulties. When there are abnormalities in income and expenditure and you cannot pay the premium, in addition to canceling the contract, in fact There is a better way.
If the capital turnover is difficult only for a short period of one year, once the time passes, you will have more abundant funds to relieve your finances. You can make good use of the "automatic advance payment" function of the policy, which can temporarily exempt you from paying premiums.
"Automatic advance payment" means that if the policyholder fails to pay the premium when it should be paid, the insurance company will send a registered reminder letter and give a grace period.
If the policyholder fails to pay the premium after the grace period, the insurance company will use the policy value reserve to automatically advance the premium and interest due for the current period to keep the contract in effect.
The policy value reserve, also known as "premium", refers to "how much the policy is worth." It refers to the premiums you have paid. This amount will accumulate year by year according to the interest rate agreed on the policy and will be used to pay for future policy-related rights. , such as termination payment, policy loan...etc.
It is worth noting that not all policies have value reserves, such as highly leveraged medical insurance, cancer insurance or critical illness insurance. Without policy value reserves, premiums cannot be paid.
It mainly depends on the contract when signing the policy, so remember to keep your eyes open when you sign the contract, and it is best to ask your salesperson in advance.
If you want to have a function like "automatic advance payment", you must pay attention to three points:
1. You need to check separately when applying for insurance
When you apply for insurance, if you do not check the "Agree to automatic advance payment" option and have not paid the payment within the grace period, the automatic advance payment function will not be activated. This is very important, so pay special attention to it!
2. Different payment methods have different regulations
For policies that are debited by credit card or paid by transfer from a financial institution, the grace period is 30 days from the day after the reminder notice arrives at the policyholder's receiving address. After the grace period, automatic advance payments will begin.
For monthly and quarterly payment policies that are collected by sales personnel in person, reminder letters will not be sent. The grace period will be 30 days from the day after the premium payment date.
3. Automatic advance payment requires interest.
The interest rate calculation methods of each insurance company are different, but the interest rate is the same as the policy loan, because it will fluctuate with government announcements. You can find out from your insurance company what the current interest rate of this policy is.
During the automatic advance payment period, the policy is still valid, but if the policy value reserve becomes less and less until it is insufficient to advance the single-day premium, the insurance company will notify the policyholder again of reminders. If the reminder reaches 30 days, the policyholder will still If the advance payment amount is not paid off, the policy will cease to be effective.
Automatic advance payment of premiums is actually a pretty good feature. After all, some people are always forgetful, or they suddenly encounter some situations in life and cannot handle the situation, so this feature is particularly important.
After all, if you buy a good policy and it lapses if you forget to pay, it would be a real pity!
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