Premium
The amount you pay an insurer, monthly or yearly, to keep your cover active.
A premium is the price of insurance: the amount you pay, monthly, yearly or once, to keep your cover active. Many people paying premiums into one pot is what lets an insurer pay the few who make a claim. See how insurance works.
Questions people ask
What is a premium in insurance?
It's the price of your cover: the amount you pay the insurer, monthly, yearly or in one go, to keep the policy active. In return, the insurer pays out if the event you're insured against happens.
What decides how big a premium is?
Mainly how likely and how large a claim could be: your age and health for life and health cover, the vehicle and its value for motor cover, and the sum insured. Choices like a higher deductible or a co-pay usually lower it.
What happens if I stop paying the premium?
After the grace period, the policy lapses and the cover stops. A life savings policy may still have a surrender value, but a pure term plan simply ends.
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