Electronic Funds Transfer for Insurance Payments

Remembering to pay your bills on time can be a hassle. You can avoid the hassle and save time and money by using a set-and-forget insurance premium bill payment method, making these due dates one less thing to worry about.

An Electronic Funds Transfer (EFT) automatically pays your bill, transferring money from your credit card, checking account, or savings account directly to your insurance company each month. Most insurance companies accept payments using EFT, preferring this as a payment method if you cannot pay in full.

EFT Professionals

There are several advantages to using electronic funds transfers to handle insurance payments.

Unique configuration

An advantage of using EFT is that you can set it up once and all future payments will be delivered on time. Your payment will be debited from your account on the same day of each month. No more writing a check and paying postage, or trying to remember the password for a billing site that you use infrequently.

Since credit cards must periodically update their expiration dates, you may prefer to use a checking or savings account as a source of funds. These account details will never need to be changed unless you change banks.

Ask your insurance agent what sources of financing are allowed by your insurance company. Some companies limit your options to checking accounts only or do not allow the use of debit or credit cards.

Save on fees

Insurers may charge payment, check processing, or service fees when you mail monthly payments. These fees can range from $ 3 to $ 10, depending on the insurer and your state.

Typically, the fee will be reduced or even waived if you set up electronic funds transfer. Plus, you never have to worry about a late fee when your payment is set to be automatically collected.

EFT discounts

In addition to saving on payment fees, some companies even offer an additional discount for choosing electronic funds transfer payments. It may not be as good as the upfront premium discount, but it all helps. Ask your insurer if they offer discounts for selecting EFT as your payment method.

EFT mistakes to avoid

While using EFT can have many benefits, there are some dangers you should be aware of.

Bank change

Don't get confused by changing banks and not notifying your insurance company. If you change banks and close the account from which you authorized the deduction of payments, the insurer will not be able to withdraw your payment and the premium will not be paid. Unpaid policies can cause big problems.

If your payments are interrupted when you change banks, you run the risk of your policy being canceled for non-payment. It is very important that you update your bill collector immediately if the financing details change.

So that you don't forget to notify a bill collector when you change banks, keep a list of all the accounts that come out of your account each month so that you can easily update each one if you change. The same applies to updating credit card numbers or expiration dates.

Change of insurance companies

If you make changes to your account or change insurers entirely, your carrier will need time to process the change. A payment that is scheduled to be withdrawn before then can continue even if your policy is canceled.

You should request that your electronic funds transfer payments be stopped as soon as you know that you are changing providers. Still, the deletion can take a few days to process, so don't wait until the last minute.

It is a good idea to protect your bank account with sufficient funds to cover your scheduled EFT, even if you are canceling your policy. If the payment is made as scheduled, the insurer will issue a refund for the overpayment.

Insufficient funds

It is important that you remember to keep enough money in your bank account to cover the payment. If the insurance company tries to withdraw the payment and it does not have sufficient funds, it is as if a check has been rejected.

The bank will charge you an overdraft fee or an insufficient funds fee. The insurer will likely charge a return fee as well, and they may cancel your policy.8 If you are paid back multiple payments, the insurer will also not be able to reinstate your policy. Keep an eye on your bank account balance and always set aside a little extra money to reduce the likelihood of a returned payment.

 

We hope you enjoy watching this video about an electronic transfer

Source: channeltube