In relation to an insurance contract, it is the amount of money that an individual or business (known as policyholders/ the insured) pays for the intended insurance coverage. Coverage may include insurance for insurable risks related to healthcare, car, home, and life.
Under conventional insurance model, premium (premia)- once issued- represents an income element for insurance firms, as it comes at the core of its business operations and value proposition. An insurance premium is paid, under the insurance contract, to the insurance provider periodically- e.g., monthly, biannually, yearly, etc. Payment of the premium keeps a respective policy active, otherwise it expires worthless.
