An insurance premium is the amount of money you pay regularly to the insurance company to keep your policy active. It can be paid monthly, quarterly, yearly, or as a one-time payment.
The premium amount depends on several things:
- Your age (younger people pay less)
- Your health (healthy people pay less)
- The coverage amount (higher cover = higher premium)
- The type of plan (term plans are cheaper than endowment or ULIP)
- Your job, lifestyle, and habits (smokers usually pay more)
Insurance companies use all this information to calculate the risk and set a fair premium. Online premium calculators are available to check the cost before buying.
Paying your premium on time is very important. If you miss payments, your policy can become inactive, and you won’t get benefits when needed.
Understanding your premium helps you plan your budget and choose the right insurance.
