Service charge

Most insurance companies will offer payment plans. Some agents and brokers have in-house payment plans. It can be a set amount as a service charge for making more then one payment. Often a monthly automatic withdrawal plan has service charges which can range from 3% to 6%.

The service charge is often considered the interest rate on financing the policy. This is not true. Since the balance declines every month the interest rate is much higher then the service fee amount.

Some insurance companies charge a fee for issuing their policy usually referred to as a Company Fee. Some agents or brokers will charge a fee for their services. This must be declared to you and explained. This is called an Agency Fee.

There should not be any hidden charges. Ask your agent or broker about service charges or fees that may apply to your policies.