Insurance Premium Definition

Insurance premiums are paid for policies that cover healthcare auto home and life insurance.

Insurance premium definition. The money paid for an insurance policy meaning pronunciation translations and examples. By paying premiums the applicant is providing considerations to the insurer in return for protection against a loss suffered by them or another party or entity. Most insurance is provided by private corporations but some is provided by the government. Financial cost of obtaining an insurance cover paid as a lump sum or in installments during the duration of the policy.

Insurance companies collect the premiums for a certain type of insurance policy and use them to pay the few individuals who suffer losses that are insured by that type of policy. Insurance premiums are the cost of insurance that an insurance company charges the applicant in order to provide coverage. Premiums are required for every type of insurance including health disability. An insurance premium is the monthly or annual payment you make to an insurance company to keep your policy active.

Your insurance history where you live and other factors are used as part of the calculation to determine the insurance premium price. A failure to pay premium when due automatically cancels the insurance policy which upon payment of the outstanding amount within a certain period may be restored.