Meaning
This refers to the amount paid to an insurance company for financial protection against specific risks.Definition
An insurance premium is the regular payment made by a policyholder to an insurer to maintain active coverage under an insurance policy.How It’s Calculated
It’s determined by factors like the insured’s risk profile, type and amount of coverage, age, and health.Purpose
The premium provides financial security. In return for this payment, the insurer agrees to cover losses as per the policy terms if a covered event occurs.Author
