This bugs me.
I have insurance for home contents, and it is a one year policy, but I pay monthly by instalments. This means I have to have a credit agreement and interest.
But insurance is inherently a service provided on an ongoing basis. The fact that I am insured tomorrow is of no use to me today. It only matters once tomorrow has come and gone, and if, by then, the insurance has not been cancelled for some reason.
So if I am getting the "product" of insurance on an ongoing basis, month by month, day by day, hour by hour, yet I am paying each month in advance, why do I need "credit"? It simply makes no sense to me.
Some might say that I receive a whole years insurance in advance, and I have that now, and it is mine, so paying for it at the start makes sense (and hence spreading payments is credit). However, and do correct me if I am wrong, if I stop paying half way through the year, will they not cancel the policy? If there is any way they can cancel the policy part way through the year for any reason, then clearly that policy and year's worth of insurance was not mine in the first place, and it really is being "provided" on an ongoing basis.
It seems wrong, and I can only assume it is some historical quirk that it is allowed to work like this.