Which term is defined as the money paid to the insurance company for the policy?

Which term is defined as the money paid to the insurance company for the policy?

• A. Policyowner
• B. Premium
• C. Insurer
• D. Broker

Answer: (B)

Premium is the money paid to the insurance company to obtain and keep a policy in force. It represents the price of the coverage you’re purchasing and can be paid on various schedules (monthly, quarterly, annually). The amount is determined by factors like your age, health, the type and amount of coverage, and the policy’s terms. Keeping up with the premium ensures the policy remains active; missing payments can cause a lapse. The other terms describe different things: the policyowner is the person who owns the policy, the insurer is the company providing the coverage, and a broker is an intermediary who helps you obtain the policy (often earning a commission). None of these describe the payment itself.

Premium is the money paid to the insurance company to obtain and keep a policy in force. It represents the price of the coverage you’re purchasing and can be paid on various schedules (monthly, quarterly, annually). The amount is determined by factors like your age, health, the type and amount of coverage, and the policy’s terms. Keeping up with the premium ensures the policy remains active; missing payments can cause a lapse.

The other terms describe different things: the policyowner is the person who owns the policy, the insurer is the company providing the coverage, and a broker is an intermediary who helps you obtain the policy (often earning a commission). None of these describe the payment itself.