If a company offers an insurance cheaper when you pay monthly by Direct Debit than if you pay one lump sum? -

by any means including DD, is it a scam? With DD they know it will be easier to collect from you and less likely that you will go to a different company in the future. With annual or semi-annual payments it is much easier for you to switch to some other company at the end of each rate period. So it is a marketing scam, but you do save money. If you don't like something about their service it is not that hard to cancel the DD and switch elsewhere. It doesn;t necessarily mean it's a scam. However, it is more work for the insurance company, so why would it be cheaper? You have to look at things logically, as you are. If it sounds too good to be true, it just may be. Ask the insurance company how they can make it cheaper when it's more labor-intensive for them to do it? Maybe it is some sort of marketing approach to get new business. It may be a good idea to ask them so you are at ease about the situation. Good thinking on your part... No idea but it does sound too good to be true, and you know what they say about that....I always pay yearly because it's cheaper in the long run but if this were an option I'd snap it up in an instant...Providing the premium was competitive! No, but I've never heard of anyone doing it . . . Irregardless of WHAT you call it, electronic funds transfer is the wave of the future.....and overall, it IS less expensive for an insurance carrier to to "draft" an account, than it is to print a bill, mail it, wait for it to come back and then process the check, and make entries into a customer's file. So...they pass the saving along to the consumer. Life insurance companies have been doing this (actually REQUIRING THIS) for years! It's really hard to find a life or health insurance company that will send you a monthly bill - they want it all done electronically. So, is it a scam? No - it's JUST a way of life. I pay my insurance this way because I don't want to tie up an annual premium and don't really want to pay it in full! Good luck and I hope this helps!