Premium

What it means

A premium is the amount you pay — usually monthly, quarterly, or annually — to keep an insurance policy in force. Miss enough payments and the policy can lapse, ending your coverage.

Why it matters

Premiums are the ongoing cost of protection, and understanding what drives them (age, health, coverage amount, policy type) helps you evaluate whether a quote is reasonable.

Common misunderstandings

• •A "level" premium on term insurance is level for the term only — it typically rises significantly if you renew afterward.
• •Lower premiums aren't automatically a better deal — they often mean less coverage or a shorter term, not a discount on the same thing.

Where you'll see it

On every insurance quote and statement.