Medigap Monday: Why Medicare Carriers Prefer the Bank Draft Option
There are three main reasons why paying your Medicare Supplement premium by direct bank draft is the preferred way to pay your premium:
- It saves money. There has to be employees to process the mail and checks that carrier receive in the mail. This means that the carriers need to pay more people and if it costs the carriers money, it costs you money. Carriers like direct bank draft because it saves them money, which in turn, keeps the premiums low.
- It’s more secure. When sending a check in the mail, there is always the chance for error. Either it gets sent to the wrong place or gets lost completely. Much more people handle the check and have access to your information, which is always risky. By using direct bank draft, only your agent sees your information and it’s put directly into the processing system.
- No lapse in coverage. Some people still prefer sending their checks in to pay their premium. I will use a real-life experience that happened to a client of mine. In this situation, a husband and wife still preferred to pay all their bills by mail and the husband handled all of the finances, which is very common. Unfortunately, he suffered a heart attack and was hospitalized for quite some time due to complications. His wife, who was not accustomed to handling the finances, missed the bill for their policy and his coverage lapsed right when he needed it the most. Now, I was able to help them get their policy reinstated by proving that he had been ill and they were able to make the back payments but what if the carrier had said no and not allowed them to reinstate their policy? Now, when they really need the supplement, they can not use it because they failed to pay their premiums. If they had used direct bank draft, they could have avoided this issue all together.