All About Premiums

The dictionary defines “premium” as “the amount paid, or payable, for an insurance policy”. There are numerous other definitions as well for premium but we will be dealing with premiums as they relate to insurance.

“I never received the bill” is no excuse for not paying a premium! All insurance policies, whether they are health, life, auto, long term care, etc., have a due date and it is your responsibility to know when the premium is due. Ninety-nine percent of the time, you will receive your bills in a timely fashion but “things” happen. Your bill could fall out of the mail carriers’ bag, it could get jammed in a postal machine, it could fall on the floor when the insurance company is sorting bills in the mailroom…. There are many things that can happen to cause a bill to go astray. The bottom line is that your policy will lapse if you do not pay the premium within the grace period.

Most companies give you a 30-day grace period. This means if your premium is due on the 1^st of the month, you actually have until the end of the month for the insurance company to receive the payment and post it to your account. This doesn’t mean you can wait until the 30^th to pay the bill. It takes insurance companies, on an average, two weeks to get your check posted to your account. If your bill is due the first, you should consider the 15^th as your absolute deadline for mailing the check. Mailing the check on the 29^th and expecting it to be posted for the preceding first of the month simply won’t work. Your coverage will lapse. Then it has to be reinstated. If you do this regularly, the day will come when the insurance carrier will no longer reinstate your policy.

Most people pay their health insurance premiums monthly so it is easy to remember that one. Your life insurance might only be paid semi-annually or annually. Mark the calendar! The same for your auto insurance. If you don’t get the bill a few weeks before the due date, CALL the insurance company.

Irene Card & Betsy Chandler share the responsibilities of running Medical Insurance Claims, Inc. a health insurance services company. If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, browse our past columns on our web site at www.micinsurance.com.

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