Premium - Glossary (2024)

FAQs

Premium - Glossary? ›

The amount of money an insurance company charges for insurance coverage. A policyholder contracts with a lender to pay the insurance premium on his/her behalf. The policyholder agrees to repay the lender for the cost of the premium, plus interest and fees.

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.

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.

Understanding a 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).

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.

As an adjective, premium implies something of superior quality that probably costs more too. Premium comes straight out of Latin, meaning “reward.” It was first used as an adjective around 1925, in the phrase "premium butter."

as in expensive. commanding a large price lavish feasts at which premium wines flowed freely. expensive. valuable. costly.

: 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.

A premium is the consideration paid for an insurance contract by someone seeking protection from predefined risks. In exchange for a premium, the insurer promises to indemnify the insured or other beneficiaries under certain conditions or circ*mstances.

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.

What is the description of a premium? ›

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

If you buy or sell something at a premium, you buy or sell it at a higher price than usual, for example, because it is in short supply. He eventually sold the shares back to the bank at a premium. Synonyms: in great demand, valuable, expensive, rare More Synonyms of at a premium. See full dictionary entry for premium.

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.

The Premium Paying Term or PPT is the period for which you must pay the required premiums for your life insurance policy. In other words, it is the term for payment of premiums. Generally, in case of Term Insurance, the premium payment term is usually equal to the policy term.

A premium brand is an individual, company, product, or service generally perceived to have an elevated status, unique quality, or exceptional value in the eyes of its target market.

Premium is the amount that the policyholder pays to the insurance company for the insurance coverage. Different life insurance companies offer different premium payment frequencies to the policyholders. A policyholder gets to choose from monthly, quarterly, annually, limited premium pay, and single premium pay option.

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.