Insurance premium

An insurance premium is the cost required to obtain insurance coverage. The insured party pays the premium to the insurer either in advance of coverage or over the course of the coverage period. If the insured party fails to pay a premium, the related insurance coverage is cancelled, though it may be restored if the premium is subsequently paid.

The amount of an insurance premium depends on many factors, including the nature of the coverage, the degree of price competition faced by the insurer, the risk profile of the insured party, and the probability of a claim being made by the insured party.

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