An insurance premium is the actual amount of money charged by insurance companies for active coverage. An insurance premium for the same service can vary widely among insurance providers, which is why experts strongly recommend getting several quotes before committing to an insurance policy. Insurance agents or brokers will take your basic information and calculate an insurance premium estimate based on your answers and other factors. The lowest quoted price on an insurance premium may be the better bargain, but the level of coverage may also be lower.
The cost of an insurance premium is largely based on statistics, not necessarily on individual habits or history. A 22 year old male seeking car insurance for a sports car can often anticipate a higher insurance premium than a 45 year old woman driving a mid-size sedan. Both may have excellent driving records, but the insurance company considers a younger driver in a faster car to be more at risk for accidents. Therefore, the insurance premium quotes will be noticeably different. In general, a more expensive or faster car will cost more to insure, simply because owners of those vehicles TEND to drive faster.
OTHER USES -- "A type of term life insurance for which the premiums remain the same throughout the duration of the contract. The premium paid on this type of policy will be higher at the beginning of its life but lower towards the end of its life as compared to term policies that have rising premium rates.
This policy is a type of term life insurance, meaning it provides coverage only for a specified duration and it has only a death benefit, no savings component. Therefore, when looking at level-premium insurance, you should carefully consider the length of coverage best suited to your needs. For example, if the primary purpose of the death benefit is to provide income to support very young children and/or fund college expenses, a 20-year level premium might be appropriate. However, if these children are already in their early teens, you may need only a 10-year level premium.
More Examples of Premium:
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a potential loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage.
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