What is the meaning of premium in insurance?

Asked by: Laila Klocko  |  Last update: February 11, 2022
Score: 4.3/5 (43 votes)

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.

What is an example of a premium?

Premium is defined as a reward, or the amount of money that a person pays for insurance. An example of a premium is an end of the year bonus. An example of a premium is a monthly car insurance payment. An unusual or high value.

Why is it called insurance premium?

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 is premium charged?

Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. ... For taking this risk, the insurer charges an amount called the premium. The premium is a function of a number of variables like age, type of employment, medical conditions, etc.

How premium is calculated?

With effect from January 2012, the premium calculation basis has been changed to a daily basis. In other words, for those with an insured period of less than a month, the premium shall be calculated proportionately according to the actual number of days enrolled and on a 30 day/month basis.

What is Insurance || what is Insured and insurer || what is premium

31 related questions found

Is a premium a fee?

A premium is the amount of money charged by your insurance company for the plan you've chosen. It is usually paid on a monthly basis, but can be billed a number of ways. You must pay your premium to keep your coverage active, regardless of whether you use it or not.

How do you describe a premium?

2 : an amount above the regular or stated price There is a premium for overnight delivery. 4 : a high or extra value He put a premium on accuracy.

What means total premium?

Total Premium means the Single Premium or the sum of all Limited Premiums/Regular Premiums paid till date, as applicable, excluding any Extra Premium, and GST and cess, if any. Sample 1.

Who pays an insurance premium?

When you sign up for an insurance policy, your insurer will charge you a premium. This is the amount you pay for the policy. Policyholders may choose from several options for paying their insurance premiums.

What are the different types of premium?

Modes of paying insurance premiums:
  • Lump sum: Pay the total amount before the insurance coverage starts.
  • Monthly: Monthly premiums are paid monthly. ...
  • Quarterly: Quarterly premiums are paid quarterly (4 times a year). ...
  • Semi-annually: These premiums are paid twice a year and are way cheaper than monthly premiums.

Is insurance premium paid monthly?

An insurance premium is the monthly or annual payment you make to an insurance company to keep your policy active. ... Though it's different for each type of insurance, the cost of your premium is usually based on a few different factors, including your age, location, type of coverage, and past insurance claims.

What is the opposite to premium?

premium. Antonyms: penalty, fine, amercement, mulct, forfeit, depreciation. Synonyms: reward, guerdon, encouragement, douceur, enhancement, bribe, recompense, bonus, prize, bounty.

What is the difference between premium and original?

As nouns the difference between premium and original

is that premium is bonus (extra amount of money given as a premium) while original is original.

What is premium refund?

A clause included in certain policies, which grants the beneficiary a refund on the face amount of their policy, including all of the premiums that they have paid so far.

How do insurances work?

The basic concept of insurance is that one party, the insurer, will guarantee payment for an uncertain future event. Meanwhile, another party, the insured or the policyholder, pays a smaller premium to the insurer in exchange for that protection on that uncertain future occurrence.

What is rating and premium?

Rating — determining the amount of premium to be paid to insure or reinsure a risk. Guaranteed cost rates are fixed during the policy period. Loss sensitive rates are those that can be adjusted after the end of a policy period, based upon the insured's actual loss experience.

Is premium better than luxury?

The key difference here is that a luxury brand, in order to remain luxury, has to have limits on volume of sales. By its nature it can't be accessible to everyone. Premium on the other hand, can still enjoy large sales figures at an over average rate.

What is the difference between premium and high quality?

As adjectives the difference between high and premium

is that high is being elevated in position or status, a state of being above many things while premium is superior in quality; higher in price or value.

What is Premium Original?

Premium Original Saltine Crackers are the classic salty, crunchy snack. Enjoy Premium Saltines dipped or crumbled into your favorite stews, soups or dips.

What is premium brand?

A premium brand is an individual, company, product, or service generally perceived to have exceptional value in the target market's mind. In other words, premium brands have the It Factor. Premium brands offer a combination of supreme quality, value, purpose, and exceptional experience.

What words mean high-quality?

  • excellent.
  • finest.
  • first-rate.
  • prime.
  • superior.
  • exclusive.
  • five-star.
  • shipshape.

Is it cheaper to pay insurance in full?

Generally, you'll pay less for your policy if you can pay in full. But if paying a large lump sum upfront would put you in a tight financial spot — say, leave you unable to pay your car insurance deductible — making car insurance monthly payments is probably a better option for you.

How often is insurance premium paid?

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.