Premium - Glossary (2024)

FAQs

What is the actual meaning of premium? ›

Broadly speaking, a premium is a price paid for above and beyond some basic or intrinsic value. Relatedly, it is the price paid for protection from a loss, hazard, or harm (e.g., insurance or options contracts). The word "premium" is derived from the Latin praemium, where it meant "reward" or "prize."

The premium payment term in insurance refers to the duration or period during which the policyholder is required to make premium payments for their insurance policy. It specifies the timeframe over which the premiums are to be paid to keep the policy in force and active.

Final answer: The premium in insurance policies is directly associated with two terms: policyholder and insurer. The policyholder is the person who buys the insurance policy and pays the premium, while the insurer is the company that offers the insurance coverage.

high-quality (adjective as in of a superior nature) Strongest matches. excellent finest first-rate prime quality superior.

Examples Of Insurance Premiums

You can usually pay either monthly or yearly depending on your policy agreement. Let's say you pay $400 a month for health insurance coverage. $400 is your monthly premium, and $400 x 12 = $4800 is your annual premium.

A premium is a payment to your insurer that keeps your coverage in place. Insurance companies determine your premium by deciding what the risk is to insure you.

A policy premium is the amount of money paid towards the life insurance policy. The policy premium component comprises pure premium, operating expenses, investment and earning margin.

While many companies use proprietary formulas to calculate the scores, the factors used in the calculation include the customer's outstanding debt, length of credit history, payment history, amount of revolving credit versus the amount of credit in the form of loans, available credit, and monthly account balance.

(priːmiəm ) adjective [ADJECTIVE noun] Premium goods are of a higher than usual quality and are often expensive.

What is premium called in insurance? ›

An insurance premium equates to the money that is paid by any person or company/business for availing of an insurance policy. The insurance premium amount is influenced by multiple factors and varies from one payee to another.

adjective. of exceptional quality or greater value than others of its kind; superior: a wine made of premium grapes.

Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.

Premium in life insurance refers to the amount that a policyholder will pay either in a lump sum or regularly to purchase the insurance policy. It is also known as policy premium. The insurers normally provide monthly or annual premium amounts for the life insurance plans.

Once your policy ends, you can't get back the premiums you paid unless you have a return of premium rider. This optional add-on lets you receive a refund of premiums if you outlive your policy term. However, a return of premium rider can increase your premiums, so you must budget accordingly when adding one.

The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance.

Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.