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Should You Pay Monthly or Annually for Health Insurance?

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SBIS partners with Manulife to provide flexible budgeting choice when it comes to selecting and paying for your health insurance coverage.

Monthly Payments are Easier for Budgeting

Monthly health insurance premiums are deducted automatically, which is convenient and makes budgeting easier. You won’t miss a payment, as long as you have enough money in your bank account. Your health insurance will be reliably in place.

When your health insurance premiums adjust every year — similar to your car or house insurance payments — paying monthly allows you to comfortably manage the changes with each small payment.

Annual and Semi-Annual Payments Can Save You Money

There can be drawbacks to annual or semi-annual payments. If you pay your premiums less often than once each month, the bill may arrive at an inopportune time. You may be facing unexpected expenses, or forget the bill because you’re away on an extended vacation. That’s why monthly payment frequency is chosen most often for health insurance premiums.

However, many people don’t realize that they pay a convenience for making monthly payments.  A monthly premium for Manulife Flexcare or Follow-Me health insurance includes a financing fee that makes the premium 4% higher than if you paid on an annual basis. For example, if your annual premium is $1,000, your monthly premiums over a 12 month period would typically add up to $1,040 a year. For semi-annual payments, the premiums over a year will result in an additional 2% premium cost that you could save if you choose to pay annually instead.

Use Your Savings to Choose Add-on Coverage

The dollars you save by selecting an annual or semi-annual premium payment frequency may mean that you can consider upgrading your Manulife health insurance with add-ons to customize your plan to your individual needs.

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Add-ons will increase your coverage in certain areas you feel are necessary. These options allow you to gain additional protection for vital needs like:

  • Hospital – Make hospital stays more comfortable with coverage for a semi-private or private hospital room. The Hospital Add-On includes a daily cash benefit if you don’t get your covered room.
  • Vision – Some families need extra coverage for vision care. Boost your maximum reimbursement for prescription lenses, frames, contact lenses and laser eye surgery with the Vision Enhanced Add-On.
  • Travel – Need emergency medical expense protection for trips lasting more than 9 days? Choose a Travel Add-On.

Can you switch how frequently you pay your premium?

With Manulife health insurance, you have the option to switch your payment frequency (also called a premium mode) between annual, semi-annual and monthly on your policy anniversary. To make the change, you must send the insurer a request letter signed and dated by the premium payor.

Tip: Pay by credit card if you can earn rewards!

Premium payments can be made by:

  • monthly pre-authorized withdrawals from your bank account, or
  • annually by cheque (after you receive an annual bill), or
  • monthly, semi-annually or annually by credit card.

So if you’d like to collect points and are hoping to pay your Manulife health insurance premiums with a rewards credit card, you will be in luck!

Remember, Paying on Time is Vital

You’re always on time, always organized – this kind of thing never happens to you. But between working and the family, you may slip up and miss a premium payment.  Late payments are one of the most common mistakes and it can be a slippery slope if you forget.

The bottom line is, which payment type you choose doesn’t matter as much as making sure your payments are made on time. Otherwise, there’s a possibility you could lose your coverage.

Typically, health insurance policies include a grace period of 30 days for each premium payment except the first. During the grace period, your insurance remains in force and premiums continue to be payable by you.

After you have made the decision to have the advantage of health insurance, it makes good sense to treat premium payments just like those for your automobile or home — as a necessity!

Let Us Help You Decide

Making your hard-earned money work best for you is important to us. Call one of our representatives today to talk. We are happy to help you set up the health insurance plan and payment schedule that will work best for you and your family’s budget.

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