What is a Premium?
Insurance premium is the dollar amount an insurance company charges in exchange for providing financial protection against the risks defined in an insurance policy.
Premium in More Detail
Insurance premiums are highly regulated, and premium rates must be filed with each state’s insurance commission to ensure pricing is adequate to ensure the financial solvency of the insurer, not excessive, and not unfairly discriminatory to consumers.
Premium is primarily determined by the type of risk being insured, individual risk factors, and the insurance company’s specific underwriting guidelines.
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