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Life Assurance - why do the insurers not offer a discount for paying annually?

  • 23-02-2018 2:09pm
    #1
    NIMAN
    Registered Users, Registered Users 2 Posts: 33,777 ✭✭✭✭


    Normally if you pay in one annual payment you would get a discount.

    But I was just checking some quotes for Life Assurance there, and there is no real difference. In fact some even charge you slightly more to pay in one go than monthly.


Comments

  • #2
    Browney7
    Registered Users, Registered Users 2 Posts: 3,100 ✭✭✭Browney7


    NIMAN wrote: »
    Normally if you pay in one annual payment you would get a discount.

    But I was just checking some quotes for Life Assurance there, and there is no real difference. In fact some even charge you slightly more to pay in one go than monthly.

    Lapse experience tends to be poor on annually paid policies. Customer sees the premium coming and the payment is a call to action in ways - "can I get this cheaper", "do I need this at all?".


  • #3
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,725 Mod ✭✭✭✭Henry Ford III


    Just ran a quote there. M30nb, n/s. LTA non indexed €250k x 20 year term.

    Annual premium €162.23. Monthly premium €14.44p/m.


  • #4
    NIMAN
    Registered Users, Registered Users 2 Posts: 33,777 ✭✭✭✭NIMAN


    The quotes I ran, which averaged out around the €55 - €65 per month mark, had only a handful of Euro difference in the annual figures.


  • #5
    axcel
    Registered Users Posts: 70 ✭✭axcel


    The monthly premium for cost of cover is basically the minimum the life companies can charge without making a loss because of competition etc (premiums are very low now for basic products compared to even few years ago) so the discount for paying annually is only the savings based on less direct debits, less admin, less bank charges etc so savings are minimal really. Why the annual would be higher, not a clue, haven't seen that before.


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