what is the meaning of premium
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Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk.
Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium. The premium is a function of a number of variables like age, type of employment, medical conditions, etc. The actuaries are entrusted with the responsibility of ascertaining the correct premium of an insured. The premium paying frequency can be different. It can be paid in monthly, quarterly, semiannually, annually or in a single premium.
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Answer:
1.
an amount to be paid for a contract of insurance.
2.
a sum added to an ordinary price or charge.
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