Description
An insurance premium equates to the money that is paid by any person or company/business for availing of an insurance policy. The insurance premium amount is influenced by multiple factors and varies from one payee to another.
Your insurance premium is the monthly amount that you pay in order to maintain coverage by an insurance company. Depending on the plan, you may have the option to pay monthly, quarterly, or annually. Some plans require you to pay upfront before coverage starts.
What is an example of an insurance premium?
For example, if your car insurance premium is $800 per year, you must pay your insurer $800 per year to have the insurance. if your car insurance has a $100 deductible on collision, and you have collision damage of $500, you will have to pay $100 of the damage and your insurer covers the remaining $400.
Monthly premiums are paid once a month, on the date of your billing cycle. While splitting up the premiums is better for some budgets, missing payments can risk a policy lapse. Annual premium payments mean that you only pay one lump sum to your insurer each year.
How often is insurance premium paid?
Your car insurance premium is the amount you pay your insurance company on a regular basis, often every month or every six months, in exchange for insurance coverage. Once you’ve paid your premium, your insurer will pay for coverages detailed in the insurance policy, like liability and collision coverage.
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