What means insurance premium?
Similarly one may ask, what is a premium in insurance?
An insurance premium is the amount of money an individual or business pays for an insurance policy. Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy.
Furthermore, why is it called insurance premium? The root “emere” means to “buy, take”. Since insurance premiums are paid in advance (before) and the product buys the transfer of risk in exponentially greater numbers (booty), the word “premium” would have made sense then (and now) in describing the price attached to the product.
Additionally, what does paying a premium mean?
Premium. 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.
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.