Insurance Premium – Definition
Insurance Premium is one of the most basic and important terms in insurance. Before we touch upon the meaning of insurance premium, it would be beneficial to look up the meaning of insurance premium from Oxford Dictionary. Accordingly, an insurance premium is defined as;
an agreed amount of money that you pay to an insurance company for insurance, either as one payment or as one of a series of payments.
Insurance Premium – Easy Definition
Telling it in the easiest way possible, while buying an insurance policy, we pay a certain amount of money. This money is called an insurance premium. Usually, insurance premiums are given on an annual base. It is because of the fact that most insurance policies are made for only 1 year and they are renewed at the end of each year.
Calculation of Insurance Premiums
The main driver in the calculation of insurance premiums is the risk level of the person or the belonging. As the risk level increase, the insurance premium goes up as well, which means, if you want to insure something risky, you are going to pay more for the insurance policy. In addition, with the same logic, insurance premiums increase based on the value of the object subject to insurance. The amounts of getting a Ferrari and a cheap car insured are never the same.
How Do You Know the Average Amount of Insurance Premium
In order to come up with an average amount of insurance premium for your insurance policy, you can get an insurance quote online. The definition of insurance quote and the ways of getting an insurance quote online is given here.
Additively, you can also see all you need in order to get an insurance quote and and that affects your insurance premium by clicking here.