Premiums Definition & Meaning | Insurance Term | CSIMarket
CSI Market
Sign In | Register

Glossary

Premiums

Insurance Term

Premium in the insurance industry refers to the amount an individual or company pays to an insurance company for insurance coverage. It is the cost of insurance and is determined by various factors such as the type and amount of coverage needed, risk factors, and the insurer*s own expenses and profit margin.

Premiums can be paid in various ways, such as annually, semi-annually, quarterly, or monthly. Some insurance companies also offer discounts for paying in full upfront or for certain types of policies.

Premiums can also be affected by factors such as the insured*s age, health, occupation, and lifestyle. For example, a young person with no pre-existing conditions may pay less for health insurance than an older person with multiple health issues.

Insurance companies also use premiums to build up reserves to pay out claims, invest and earn interest on those reserves, and cover their own expenses and profits. Premiums, along with deductibles and co-payments, help to distribute risk among a large group of policyholders and ensure that there are enough funds available to pay out claims when necessary.

Overall, premiums play a crucial role in the insurance industry by providing the necessary funds for insurance companies to offer coverage, manage risks, and protect individuals and businesses from financial losses.


More Glossary Terms Beginning with P
  • Paediatric Exclusivity
    means, in the US, a six-month period of exclusivity to market a drug which is awarded by the FDA in return for certain paediatric clinical studies using that drug. This six-month period runs from the date of relevant patent expiry.
    Health Care Term Letter: P
  • Paid Development Method
    An actuarial method to estimate ultimate losses for a given cohort of claims such as an accident year/product line component. If the paid-to-date losses are then subtracted from the estimated ultimate losses, the result is an indication of the unpaid losses. The basic premise of the method is that cumulative paid losses for a given cohort of claims will grow in a stable, predictable pattern from y
    Insurance Term Letter: P
  • Panelboards
    Oriented strand board, particleboard, medium density fibreboard and plywood. Operating Statistics
    Manufacturing Term Letter: P
  • Partial Remission PR
    A decrease in the size of a tumor, or in the extent of cancer in the body, in response to treatment.
    Health Care Term Letter: P
  • Particleboard
    A panelboard produced by chemically bonding clean sawdust, small wood particles and recycled wood fibre under heat and pressure. Forestry & Wood Products Industry Operating Statistics
    Manufacturing Term Letter: P
  • Particulate Matter
    Total suspended particulate. A measure of the solid particles (wood, process dust and smoke) found in air emissions.
    Manufacturing Term Letter: P
  • Particulates
    Tiny particles of a substance.
    Manufacturing Term Letter: P
  • Passenger Load Factor
    Represents the total number of seats sold as a percentage of total seat capacity on all sectors flown. Airline Industry
    Transportation Term Letter: P
  • Passenger Mile Yield
    The amount of passenger revenue earned per revenue passenger mile during a reporting period Airline Industry
    Transportation Term Letter: P
  • Passenger revenue yield per Mile Average Yield per RPM
    Represents the average scheduled passenger fare revenue for each revenue passenger mile (RPM), or each mile a scheduled revenue passenger is flown. Airline Industry
    Transportation Term Letter: P
  • Passive Immunotherapy
    Immunologically active material transferred into the patient as a passive recipient. Monoclonal antibodies are considered Passive Immunotherapy since antibodies are generated outside the body and given to the patient
    Health Care Term Letter: P
  • Patent Term Extension
    means an extension of up to five years in the term of a US patent relating to a drug which compensates for delays in marketing resulting from the need to obtain FDA approval.
    Health Care Term Letter: P