An insurance premium is the amount you pay for your policy. When you’re shopping for insurance and you hear “insurance premium,” think “insurance price.”
Consumers find the definition of insurance premium confusing. A 2014 study by industry research group LIMRA and consulting firm Maddock Douglas found that consumers interpret “premium” to mean “the best” — and rightly so, because only the insurance industry uses “premium” to mean price.
If you’re shopping for car insurance, you’ll pay the highest prices for full coverage car insurance, which includes liability, comprehensive and collision coverage.
If you’re shopping for life insurance, you’ll find that permanent life insurance policies such as whole life insurance are the most expensive.
Insurance payment options often include paying monthly, semiannually or annually. Your insurance company might give you a small price break for paying your premium annually.
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