A premium is the price of your insurance.
Key Points
- You pay the premium monthly, quarterly, yearly, or as decided in the policy.
- As long as you pay premiums, your insurance coverage (protection) continues.
- The insurance company uses this money to cover claims and provide financial protection.
Example
If you buy health insurance:
- You pay ₹10,000 yearly as the premium.
- In return, the insurance company will pay your hospital bills when needed.
Why premiums vary
Premiums depend on:
- Age
- Health condition
- Type of insurance
- Coverage amount
- Risk level
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