The myth of monthly payments

You may have seen recent articles that suggest you should pay premiums monthly rather than annually to protect yourself from the outside chance that your insurer could go bust. But as most policies are annual, not monthly, all you are doing with a monthly premium is paying the annual cover in instalments. If the insurer went bust, you would still be pursued by the liquidator or administrator for the balance of the months owed.

Some insurers even offer a discount if you pay annually rather than monthly. Others charge for the privilege of paying monthly.

Health insurance: Hot Topic: October 2008