Insurance Premium

When you are purchasing an insurance policy, you must find the word "premium" in your contract. This word means an insurance fee which you pay to make your insurance policy active.

What is premium?

Premium is an amount paid for the insurance policy. Premiums may change or remain the same throughout a term depending on the type of the policy issued.

The premium cost is set by an insurance provider regrading on different factors. There are several factors an insurer uses to determine the premium cost like type of policy, age, gender, heath condition, habits, residence and so on. 

The premium can be paid in installments like monthly, quarterly, semiannually, annually or full payment. Failing to pay premiums may lead to the cancelation of the policy. Some policy providers may give a policyholder a grace period of about 30 days to complete the payments. Normally, premiums are not returned once a policyholder cancel the policy.