What does premium mean in benefits?
Asked by: Miss Marquise King | Last update: December 1, 2025Score: 4.5/5 (20 votes)
Does premium mean you have to pay?
An insurance premium is the amount you pay to your insurer regularly to keep a policy in force. You may be able to pay premiums monthly, quarterly, every six months or annually, depending on your insurance company and your specific policy.
What does premium mean in health insurance?
A health insurance premium is the amount – typically billed monthly – that policyholders pay for health coverage. Policyholders must pay their premiums each month regardless of whether they visit a doctor or use any other healthcare service.
What is meant by premium 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.
What is the actual meaning of premium?
: a sum over and above a regular price paid chiefly as an inducement or incentive. c. : a sum in advance of or in addition to the nominal value of something. bonds callable at a premium of six percent.
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Is premium the same as insurance?
An insurance premium is the amount of money an individual or business pays for an insurance policy. Insurance premiums are paid on policies that cover a variety of personal and commercial risks. If the policyowner fails to pay the premium, the insurance company may cancel the policy.
Does premium mean free?
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."
How does premium work?
An insurance premium is the amount the policyholder agrees to pay in exchange for coverage. It guarantees financial compensation for the damages or losses they incur, as long as timely payments are made.
What is a premium example?
"At a premium" is a phrase attached to situations where a current value or transactional value of an asset is trading above its fundamental or intrinsic value. For example, "Company X is trading at a premium to company Y." Or, "A commercial building was sold at a premium to its underlying value."
What is an example of insurance premium?
The average homeowners insurance premium is $1,820 a year, NerdWallet's January 2024 rates analysis found. Homeowners insurance premiums are based on a variety of factors, such as the building's location and value, your credit score in most states, your claims history and the amount of coverage you want to buy.
What is benefits premium?
Answer: A premium is the amount which you will pay for your international health insurance plan whilst a benefit is a type of coverage that same plan will provide you with. Simply put, the more comprehensive a plan you purchase the more it will normally cost.
Why is my monthly premium so high?
Five factors can affect a plan's monthly premium: location, age, tobacco use, plan category, and whether the plan covers dependents.
What is a premium vs deductible?
Monthly premium x 12 months: The amount you pay to your plan each month to have health insurance. Deductibles: How much you'll spend for certain covered health services and prescription drugs before your plan pays anything, except free preventive services.
What does health insurance premium mean?
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. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.
How does premium pay work?
Premium pay is additional pay provided to employees for working certain types of hours or under certain types of conditions, as provided under 5 U.S.C. chapter 55, subchapter V and 5 CFR part 550, subpart A. Premium pay paid under title 5 is subject to certain biweekly or annual pay limitations.
Is premium a refund?
Insurance Premium Refund. An insurance refund refers to when the insurance company returns a part of the premium paid by the policyholder, usually due to the cancellation of the policy before its expiration date, overpayment of premiums, or adjustments made to the policy terms.
Is an insurance premium monthly or yearly?
Premiums are usually paid either monthly, every six months, or annually and are determined by various factors, including your driving record, age, and the coverages you select as part of your policy.
What is the legal definition of premium?
The consideration paid for an insurance contract by someone seeking protection from predefined risks. A premium payment may consist of one lump sum or, as is more common, periodic installments for the life of the contract.
What is premium insurance in simple words?
An insurance premium is the amount paid by a policyholder to maintain coverage. Factors influencing premiums include age, Health, Lifestyle, Location, and Coverage type.
Why do companies pay a premium?
Typically, an acquiring company will pay an acquisition premium to close a deal and ward off competition. An acquisition premium might be paid, too, if the acquirer believes that the synergy created from the acquisition will be greater than the total cost of acquiring the target company.
Why is premium paid?
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.
Is a premium an income or expense?
All policies come with premiums. If they expire, they must be recorded as an expense. Unexpired premiums should be listed as prepaid insurance, which is listed in an asset account.
Does premium mean best?
Something that's premium is much better than average — it's excellent, in fact.
How is premium calculated in insurance?
The premium is typically determined by multiplying the base rate (a predetermined rate per unit of coverage) by the applicable rating factors for the insured individual or property. Adjustments may also be made for discounts, surcharges, or other factors that affect the final premium amount.
What is insurance premium funding?
Insurance premium funding is a simple, fixed rate loan that enables a business to spread the cost of insurance. The core benefit being that it can help you regulate your business' cash flow, providing ongoing access for day-to-day financing requirements.