Paying Your Insurance Premium Monthly
Most small business owners pay their insurance premiums monthly for a good reason: it’s easier to budget when you know your monthly expenses, and you can avoid having to shell out one lump sum for your policy.
It’s not uncommon for a broker or insurance company to offer monthly or annual payment options. For an existing business, you will be asked to pay the first month of your premium, followed by 11 monthly payments.
If your company is a startup or new venture, we ask for a down payment as low as 20% of your premium from the get-go, followed by nine monthly payments. If you miss making a payment (which can happen to anyone), you are given a 30-day grace period to catch up without triggering a lapse in your coverage.
There’s also the convenience factor. For instance, if you have a commercial general liability insurance policy that costs $450 per year and you pay $37.50 for it each month, you can automate those payments through your bank account.
You’ll know which date each month the withdrawal will happen, can track the payments throughout the year, and comfortably manage your budget. However, by opting for a monthly payment plan, you are also charged a small administration fee by your insurance provider to process the monthly payments manually.
Paying Your Insurance Premium Annually
Some small business owners may pay their premiums in one annual payment. If you can comfortably afford to do so, there are benefits to taking this route.
For starters, there’s the peace of mind knowing you’re covered for 12 months until your policy comes due for renewal, and you don’t need to worry about paying for your policy or missing a payment. On the other hand, you might incur a late payment fee if you miss a monthly payment.
Paying annually also eases the administrative burden on the insurer to process your premium. Since they don’t have to manage monthly payments manually, they won’t charge you a small administrative fee, which is usually the case when making monthly payments.
Making the Right Decision That Suits Your Budget
The decision you make depends entirely on your business’s finances.
By paying your premium as one lump sum and avoiding monthly financing fees, determine how much you’ll save. For instance, if paying annually will save you a few hundred dollars, and paying upfront won’t cause any financial strain, it may be the best way to go.
But paying a premium monthly is fine since it breaks up the cost into manageable amounts throughout the policy term. Furthermore, some insurers may offer semi-annual and quarterly premium payment options.
Talk with one of our licensed brokers about which option may be best for you when initiating a new policy or renewing an existing one.
Also, Zensurance does not charge its customers any fees for purchasing a policy through us, whether for payment processing, account maintenance, or getting a certificate of insurance. Instead, when you buy a small business insurance policy through Zensurance, we receive a small commission from the insurance provider underwriting your policy.
Fill out our online application for a free insurance quote. We can find the low-cost protection you need through our partner network of more than 50 insurance providers and customize it to suit your specific requirements.