Premium
In every insurance policy, in order for the company to start its coverage to the insured, the policyholder is subject to pay the premiums rates depending on the type of insurance policy and the range it covers.
What is a Premium?
In the insurance industry, a premium is the amount of money the insured has to pay to the insurance company to activate the coverage. This premium rate will vary from different insurance providers this is the reason why experts urge possible policyholders to research and inquire first before committing to avail an insurance policy. Once the possible client will inquire for these matters, the insurance brokers and agents will be the one who will take into consideration in taking the client’s basic information and compute the ballpark premium of the insurance based on the answers and some other factors. The lowest premium may be a good bargain but take in mind that the coverage of the insurance varies from the premiums.
The insurance premium cost is widely based in a given statistics and not essentially on the individual’s history or habits. For instance, a 23-year old man looking for insurance for her sports car may often anticipate a much higher premium rate compared to a 48-year old women who is driving in an average sized sedan. Both are considered to be good drivers but insurance company would take into account a younger driver to be more at risk from the fact that he can drive faster compared to the old ones. Hence, the insurance premium would be way more different. Generally, a faster and more expensive car may cost a higher premium since the owners are tend to be at high risk for any accident.
The same is true when it comes to the premium rates in medical insurance. For example, non smokers may live longer than smokers. Those that are working in the construction may meet more accidents compared to the accountants. A 45 year-old carpenter who smokes may have a higher insurance premium compared to a 30-year old office worker who doesn’t smoke. On the other hand, premiums may be lessened or reduced if and only if the policyholder is taking the chances of changing his lifestyle and habits.
Generally, insurance premium is collected in semi-yearly or monthly payments. If in case the policy holder missed to pay the premium on the scheduled date, the insurer has the power to cancel entirely the policy. This is known as lapsed policy. However, aside from cancelling the policy, the policyholder can pay the balance of the premium and let the policy be reinstated of if not it will be null and void. Since the payment cycle is very lengthy, it is not common at all that sometimes policy holders might tend to forget to do a payment.
Insurance premium may go up and down during the billing cycle depending on until to what extent the accident had damaged and as to whose fault is. Paying for the premium might be a heavy burden to some and a waste of cash but if you take into consideration that your cost and the expenses will meet half way, then you’ll never regret it.
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- Uninsured Motorist Coverage
- Unearned Premiums
- Additional Interest
- Subrogation
- Accident-Year Statistics
- Additional Car
- Addendum
- ACV
- Accident Severity
- Accident Insurance