Have you ever wonder what is an insurance premium is all about, the kinds or types of insurance, the benefits of it and a lot more. With the help of the article, you will be able to find all the answers to the questions coming across your mind.
What is an Insurance Premium?
Insurance premium means specified amount stipulated by the insurance company, which the insured individual should periodically pay to maintain the actual coverage of coverage, or is the price a person or business (Insured) pays for an insurance policy.
Insurance companies came up with the price of the premium. The first people called the actuaries to work for the insurance companies to determine the particular brisk associated with the policy. They saw3 things like how an accident or disaster is, and the likelihood of the claim being filed, and how much the company will be on the hook for the paying out if a claim is filed. This information was put into a chart called an actuary table and it was given to a person called an underwriter.
What is the Difference Between a Premium and Deductible?
If you ever had the need to make a claim on your insurance will be asked to pay a deductible, which can be confusing to you because you have already been paying for your premium. The difference is your premium is a regular cost that you have to pay every month, year or quarter, depending on the arrangement you must have on the ground with your company. You have to pay your premium whether or not you make a claim. The amount which you pay only when you make an insurance claim is the deductible.
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How an Insurance Premium Works
The price charged by the insurer is the premium, an insurance company, can provide insurance coverage. Premiums are the revenue or the source of income for the insurance company. The premium can be due yearly, quarterly or monthly depending on the agreement with the insurance company. If you fail to pay up the premium may result or lead to the cancellation of the policy and the coverage loss as well.
How Much Does an Insurance Premium Cost?
The cost of the homeowner’s insurance premium varies and it depends on a few factors. Below are some of the factors:
- The amount of coverage you choose.
- The location of your apartment.
- The types of coverage you choose.
- Your Personal info and history.
These are the lists of insurance premium costs.