Premium
/PREE-mee-um/
The amount you pay for your insurance policy.
Definition
A premium is the amount of money you pay to an insurance company in exchange for coverage. Premiums can be paid monthly, quarterly, semi-annually, or annually. The amount is determined by factors like your risk profile, coverage levels, deductible choices, and discounts. Lower premiums often mean higher deductibles or less coverage.
Example
Sarah pays a $150 monthly premium for her auto insurance, which totals $1,800 per year.
More General Terms Terms
The amount you pay out-of-pocket before insurance kicks in.
The contract between you and your insurance company.
A request for payment under your insurance policy.
The protection provided by your insurance policy.
The maximum amount an insurer will pay for a covered loss.
Something your insurance policy specifically does not cover.
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