Premium

Insurance

An insurance premium is the periodic amount you pay (monthly, quarterly, or annually) to maintain an insurance policy. Premiums are calculated based on the insurer's assessment of risk — age, health, location, coverage amount, and claim history all factor in. Lower premiums typically mean higher deductibles or limited coverage. Term life insurance premiums for a healthy 30-year-old might run $20-$40/month for $500,000 coverage; the same coverage at 55 might cost $200+. Auto premiums depend on driving record, vehicle, ZIP code, and credit. Shopping premiums every 2-3 years often reveals savings, especially after major life changes.