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Insurance premium

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Insurance Premium

What is Insurance Premium?

A little sum paid to obtain the benefits of your chosen insurance policy. Insurance premium can be paid full at once or periodically (monthly, bi-monthly, yearly) in little sums (installments).

How much premium we have to pay?

The amount of insurance premium to be paid depends on certain criteria like type of insurance, insurance plan, age, health, the area where someone lives…

Consider, a 20 year old applying insurance for a sports car and 40 year old applying for a mid class sedan. Both may be good drivers but, the insurance company charges higher premium for the 20 year boy citing faster driving in sports car and greater risk of accidents. Similarly a person who smokes pay higher health insurance premium than who doesn’t smoke and an earth quake prone region attract higher house insurance premiums.

Premium Rates

Insurance premium rates also increase for a number of reasons like inflation, health conditions, area of person working. Say a student applied for health insurance now working in industrial area then the insurance company increases the premium rate.

Insurance premium has to be paid regularly, if the policy holder fails to make regular payments he will be penalised or in extreme cases his policy will be revoked.

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4 COMMENTS

  1. Insurance premium is a part of our income which we to the insurance company. It is usually paid monthly. Taking an insurance has become a need these days, owing to the fast-paced life, accidents and numerous illnesses. Insurance premium should always be decided taking into consideration the prices after 15-20 years. the principal amount which you will receive after these many years should match the prices of that time so that you may satisfy your needs.

  2. Insurance premiums also has one more facet to it. the younger your age is, the lesser you start with the premium amount. This is true for life insurance policies or medi claim policies. And wide range of benefits are offered when you are young. It has lot of benefits in terms of returns which you get. And you start saving early so long term benefits are compounded. Better to start reading about it more and investing accordingly

  3. Premiums are the amount of sum paid for the insurance choosen to the insurance company. This amount is fixed by the company and the individual at the time of selecting the policy. It differs from person to person in accordance to the policy choosen, age, health and risk involved.

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