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What is an insurance premium?

Simply put the insurance premium is the amount of money paid by a policyholder by instalments or one lump sum payment for the insurance coverage provided on a policy.

As a policyholder this premium reflects what the insurer believes is the likelihood you will make a claim and the cost of that claim. In exchange, the policyholder has purchased from the insurer a policy providing cover for when he or she suffers loss or damage that is covered by the policy.

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