What is an insurance premium quizlet?

An insurance premium is the amount of money an individual or business pays for an insurance policy. It is typically paid on a monthly, quarterly, or annual basis and is based on a number of factors, including the type of insurance, the coverage amount, the insured's age, health, and location, and the insurance provider's underwriting criteria.

Insurance premiums help the insurance company to cover the cost of claims and other expenses, such as administrative costs and profit margins. The premiums collected from all policyholders are pooled together in a fund, which is then used to pay out claims when they occur.

Premiums can vary widely based on these factors and can be adjusted over time based on changes in the insured's circumstances or changes in the insurance provider's risk assessment. It is important for individuals to carefully consider their insurance needs and shop around for the best premium rates before purchasing a policy.