GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Premium


Synonyms:annuity premium, insurance premium, premium payment
Filed Under: financial-banking, insurance
Tags: banking, insurance
 

Definition of premium

premium
1. The amount paid by the insured to the insurer for insurance coverage, as set in the insurance policy. Premiums are paid to compensate the insurer for taking on liabilities and risk.

Related Terms and Acronyms:

  • insurance (insur)   An arrangement where one party provides financial protection to another party for specific damages or losses.
  • insurance policy   A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
  • mortality and expense risk charge   A charge sometimes applied to reimburse an insurer for the risks in a policy.
  • policy declarations   The section of the insurance policy that declares the specifics of the insurance policy including premiums, named perils, and policy limits, amongst others.
  • pre-paid insurance   A insurance policy where insurance premiums are all paid in advance, normally offered in one year terms.
  • reinsurance   The process of one insurance company sharing liabilities from an insurance policy with another insurance company in order to lessen exposure, or in other words, insurance for insurers.
  • underwriting (UW)   Assessing individuals for eligibility and issuing and distributing a financial product such as insurance, equity capital or credit.
  • underwriting guide   The rules and guidelines an underwriter must follow while writing policies.
  • vanishing premium policy   A life insurance policy where policy dividends are used to pay the policy's premiums.
  • variable universal life insurance (VULI)   A form of life insurance with adjustable premiums, flexible investment options, and tax efficiency.

More Related Terms and Acronyms

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