Definition of Premium in Insurance
Regular payments are made to the insured by the insurance company for the life risks of the policyholder. An insurance premium is an annual payment that an individual pays to an insurance company.
As a rule, a premium is understood as an additional payment for buying a share. This term is mainly used in the stock market where a shareholder can sell or buy shares. When a shareholder buys a share for extra money plus its face value, that extra money is called a premium.
But from an insurance perspective, premiums have a different meaning. Premium means a sum of money that an insurance company receives from an insured who promises to cover the loss of the insured product. If the premium is paid more than once, it is called an installment plan. Under a life insurance contract, the policyholder has to pay his premium to the insurer at various intervals. In this type of insurance, the policy holder has to pay the sum insured in installments. This premium is called life insurance premium. Premiums are actually the cost of buying insurance.
A premium is the amount for which an insurer provides a financial guarantee against a risk on behalf of the insured . Prizes may be awarded once or multiple times.
To know more about insurance premium or insurance premium, see: Characteristics of insurance premium .
As a rule, a premium is understood as an additional payment for buying a share. This term is mainly used in the stock market where a shareholder can sell or buy shares. When a shareholder buys a share for extra money plus its face value, that extra money is called a premium.
But from an insurance perspective, premiums have a different meaning. Premium means a sum of money that an insurance company receives from an insured who promises to cover the loss of the insured product. If the premium is paid more than once, it is called an installment plan. Under a life insurance contract, the policyholder has to pay his premium to the insurer at various intervals. In this type of insurance, the policy holder has to pay the sum insured in installments. This premium is called life insurance premium. Premiums are actually the cost of buying insurance.
PHCollin defines premium as “Insurance premium means an annual payment made by an individual to an insurance company”.
The Oxford Advanced Learner's Dictionary defines premium as "Premium means the amount or money regularly paid for an insurance policy".
A premium is the amount for which an insurer provides a financial guarantee against a risk on behalf of the insured . Prizes may be awarded once or multiple times.
To know more about insurance premium or insurance premium, see: Characteristics of insurance premium .
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