1 Month Bank Draft or 12 Month Bank Draft

[SamIam]

That 12 month bank draft doesn't mean they are drafting 12 months up front does it. Why would they give an option for a 1 month bank draft?

 

[goillini52]

That 12 month bank draft doesn't mean they are drafting 12 months up front does it. Why would they give an option for a 1 month bank draft?

Most companies only do a monthly bank draft. A few also do quarterly, semi-annually and annually.

 

[RayNY]

Have we found out if this is a 12-month lump sum up front, or pre-authorization for 12 months of monthly drafts?

 

[SamIam]

12 month lumps sum from what my rep told me but she didn't sound confident.

 

[goillini52]

On Assurant's app under Automatic payment(Bank Draft) it says to choose how often: Monthly, Quarterly, Semi-Annual or Annual....so they're talking about drafting once a year.

 

[Post Quartermaster]

Assuming you are referencing an on HIX enrollment, some carriers allow for different means of making the initial premium payment/binder and the recurring payment.

 

[AllenChicago]

That 12 month bank draft doesn't mean they are drafting 12 months up front does it. Why would they give an option for a 1 month bank draft?

Sam, if you're referring to our local colored company, the 12 month option in the drop-down box does indeed mean that they will draft 12 months, after the 1st month initial payment is drafted.


For on-exchange plans, the maximum frequency of withdrawal is 2 months at a time (after the initial 1st month is drafted). Off-exchange, the maximum frequency is monthly.
-allen

 

[RayNY]

2 months at a time as in bi-monthly (6x annual) withdrawals? Or they can only withdraw 2x the premium amount?

(Just thinking about that 90 day grace period. Big potential there to need to withdraw more than 2x the premium).

 

[AllenChicago]

2 months at a time as in bi-monthly (6x annual) withdrawals?

Right Ray. The Blue payment system for 2014 is now reversed from how it's been over the past 2 decades. It's always been 2 months premium for those who received a paper bill and wrote a check. Auto-Checking deduction was always 1 month.


Now, auto-pay is 2 months and paper billing of 1 month at a time is allowed. I wonder what's the business logic behind this reversal?

 

[Yagents]

Now, auto-pay is 2 months and paper billing of 1 month at a time is allowed. I wonder what's the business logic behind this reversal?

The law requires the ability for monthly billing (of course more costly), in addition to cash payments/money orders and probably gold bullion. To offset costs, they stuck it to the people who want the ease of online draft, by providing less options at less cost.