Premium
Premium is a term used in the financial world to refer to the amount of money paid to purchase an insurance policy or other financial product. It is the amount of money that the policyholder pays to the insurance company in exchange for the coverage provided by the policy. Premiums are typically paid on a monthly, quarterly, or annual basis. The amount of the premium is determined by a variety of factors, including the type of policy, the amount of coverage, and the age and health of the policyholder.
History of the Term
The term “premium” has been used in the insurance industry since the late 19th century. It was originally used to refer to the amount of money paid to purchase a life insurance policy. Over time, the term has come to be used to refer to the amount of money paid for any type of insurance policy, including health, auto, and homeowners insurance.
Comparison Table
| Type of Policy | Premium |
|---|---|
| Life Insurance | $50/month |
| Health Insurance | $200/month |
| Auto Insurance | $100/month |
| Homeowners Insurance | $50/month |
Summary
Premium is a term used in the financial world to refer to the amount of money paid to purchase an insurance policy or other financial product. The amount of the premium is determined by a variety of factors, including the type of policy, the amount of coverage, and the age and health of the policyholder. For more information about premiums, visit websites such as the Insurance Information Institute, the National Association of Insurance Commissioners, and the Centers for Medicare and Medicaid Services.
See Also
- Insurance
- Deductible
- Co-Payment
- Coverage
- Risk
- Underwriting
- Actuarial Science
- Premium Tax
- Risk Management
- Reinsurance
