West Virginia Life and Health Practice Exam

In insurance terminology, "premium" specifically refers to the amount paid by the policyholder for coverage. This is a fundamental concept in insurance as it directly relates to the financial agreement between the insurer and the insured. The premium serves as the primary source of revenue for an insurance company, allowing it to manage risk and provide coverage for various events, such as health issues, property damage, or life insurance claims.

The premium is typically paid on a regular basis, such as monthly, quarterly, or annually, and is essential for keeping the policy active. Understanding this term is crucial for anyone studying insurance, as it represents the cost of purchasing insurance protection and is a key factor in determining the affordability and accessibility of coverage options.