premium

A premium is the amount of money an individual or business pays regularly—such as monthly or annually—to an insurance company in exchange for coverage. Think of it as a subscription fee that keeps your insurance policy active, providing financial protection against specific risks like accidents, health issues, or property damage. If a covered event occurs, the insurance company helps cover the costs, but you must continue paying premiums to maintain your coverage. The premium amount depends on factors like the level of coverage, coverage type, and risk profile.