How finance folk use it
An insurance premium is the amount that you pay for coverage when you take out an insurance policy. It can be paid all at once, or quarterly, semi-annually or annually, depending on the company and your preferences.
Your premium is determined by several factors. In life insurance, for example, your age and health are important considerations. For car insurance, the model, value and age of your vehicle are looked at.
Riders, which are optional provisions that add benefits to or amend the terms of a basic insurance policy, also affect how much you pay.
Is it good or bad?
The premium is part of how you keep yourself, your loved ones or the things you own protected in case of an accident or other unforeseen incident. The different payment schemes that most insurance companies offer helps make it affordable, especially if giving a lump sum would be difficult for you.
Your insurance premium can be paid in many ways. These include credit and debit cards, auto-debit arrangements, post-dated checks, over-the-counter transactions, ATMs, online banking platforms and phone banking.
What it means for you
When you keep paying your premium, the person or item is insured for the duration that is specified in the contract. This gives you some peace of mind for the future.
The many options, including different schedules and channels, make it easy for you to keep up with your payments, and keep the coverage active.
