Premium

Importance: 0.57

Is a company: no

Is a proper noun: no

Synonyms

  • premium payment
  • insurance premium
  • annuity premium

Definition of Premium

  1. The amount paid by the insured to the insurer for insurance coverage, as set in the insurance policy. Premiums are paid to compensate the insurer for taking on liabilities and risk.

Related Terms and Acronyms

  • Vanishing Premium Policy Definition,
    • A life insurance policy where policy dividends are used to pay the policy's premiums.
  • Underwriting Guide Definition,
    • The rules and guidelines an underwriter must follow while writing policies.
  • Incurred But Not Reported (IBNR) Acronym,
    • An estimate of how much an insurance company owes to policyholders for losses that have already occurred but have not yet been reported.
  • Earned Premium (EP) Acronym,
    • The amount of premiums that an insurer has collected from an insurance policy at a given time.
  • Fixed Premium Definition,
    • Insurance or annuity premiums that stay level for a specific period of time.
  • Annuity Consideration Definition,
    • The payment(s) made by an individual in order to accumulate value in an annuity.
  • Policy Declarations Definition,
    • The section of the insurance policy that declares the specifics of the insurance policy including premiums, named perils, and policy limits, amongst others.
  • Developed to Net Premiums Earned Definition,
    • A method used to determine if the premiums charged by an insurer are in balance with the benefits they pay out.
  • Policyholder Dividend Ratio Definition,
    • A ratio comparing the dividends paid to policyholders to net premiums earned by the insurer.
  • Unearned Premium Definition,
    • Premiums that have not yet been collected from an insurance policy.
  • Underlying Retention Definition,
    • The liability an insurance company still retains after ceding liability to a reinsurer.
  • Policyholder Surplus Definition,
    • A method of determining an insurance company's relative financial strength by finding the difference between the company's assets and liabilities.
  • Declining Life Insurance Definition,
    • Life insurance with a decreasing death benefit, often used to insure mortgage debt.
  • Paid-up Additional Insurance Definition,
    • The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
  • Reinsurance Definition,
    • The process of one insurance company sharing liabilities from an insurance policy with another insurance company in order to lessen exposure, or in other words, insurance for insurers.
  • Underwriting (UW) Acronym, Important,
    • Assessing individuals for eligibility and issuing and distributing a financial product such as insurance, equity capital or credit.
    • The analysis of risk involved in making a mortgage loan to determine whether the risk is acceptable to the lender. Underwriting involves evaluating the property as outlined in the appraisal report, and also evaluating the borrower's ability and willingness to repay the loan.
  • Pre-paid Insurance Definition,
    • A insurance policy where insurance premiums are all paid in advance, normally offered in one year terms.
  • With-Profits Policy Definition,
    • Insurance that pays the policyholder a portion of the insurer's profits.
  • First Dollar Coverage Definition,
    • Insurance coverage that does not require the insured to pay a deductible.
  • Variable Universal Life Insurance (VULI) Acronym, Important,
    • A form of life insurance with adjustable premiums, flexible investment options, and tax efficiency.
  • Premiums Written Definition,
    • A sum of the premiums from all the policies that a company has written in a given period of time.
  • High Deductible Health Plan (HDHP) Acronym,
    • Health plans with high deductibles and low premiums.
  • Attained Age Definition,
    • The current age of an insured individual.
  • Utilization Definition,
    • How frequently a policyholder makes use of their insurance policy.
  • Fixed Expenses (FE) Acronym,
    • Fixed business costs that do not change regardless of business volume, such as property rental, insurance payments, utilities, etc.
  • Instalment Definition,
    • The regular periodic payment that a borrower agrees to make the lender.
  • Premium-to-Surplus Ratio Definition,
    • A method used to determine an insurance company's financial stability.
  • Insurance Policy Definition,
    • A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
  • Insurance (insur) Abbreviation,
    • An arrangement where one party provides financial protection to another party for specific damages or losses.
  • Annuity Definition,
    • A financial instrument that disperses a number of payments over a set period of time.
    • A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
  • Accommodation Line Definition,
    • As a favour to a broker, insurance companies will sometimes approve coverage to an individual who would not otherwise qualify.
  • Mortality and Expense Risk Charge Definition,
    • A charge sometimes applied to reimburse an insurer for the risks in a policy.
  • Premium Balances Definition,
    • A ledger kept by insurance companies recording insurance premiums.
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