Insurance
Premium
The regular payment you make to maintain your insurance coverage.
Also known as: insurance premium, premium payment
What You Need to Know
A premium is the amount you pay regularly (monthly, quarterly, or annually) to keep your insurance policy active. It's the cost of having insurance protection.
How Premiums Work:
- You pay premiums whether you file claims or not
- Premiums are based on risk factors like age, location, driving record, and coverage level
- Higher deductibles typically mean lower premiums
- Premiums can increase after claims or policy changes
Example: If your car insurance premium is $1,800/year, you pay $150/month to maintain coverage. This payment keeps your policy active regardless of whether you file any claims.
Key Point: Premiums are the cost of insurance, while deductibles are what you pay when you use it.
Sources & References
This information is sourced from authoritative government and academic institutions:
- healthcare.gov
https://www.healthcare.gov/glossary/premium/
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