Residual Market Plan – method devised for coverage of greater than average risk individuals who cannot obtain insurance through normal market channels. Renewable Term Insurance – insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent What is Premium? Definition of Premium, Premium Meaning upon medical examination. Risk Based Capital Ratio – ratio used to identify insurance companies that are poorly capitalized. Calculated by dividing the company’s capital by the minimum amount of capital regulatory authorities have deemed necessary to support the insurance operations.
Credit – Involuntary Unemployment – makes loan/credit transaction payments to the creditor when the debtor becomes involuntarily unemployed. Commercial Mortgage-Backed Securities – a type of mortgage-backed security that is secured by the loan on a commercial property. Collateralized Bond Obligations – an investment-grade bond backed by a pool of low-grade debt securities, such as junk bonds, separated into tranches based on various levels of credit risk. Ceding Company – an insurance company that transfers risk by purchasing reinsurance.
What Are Insurance Premiums?
Assigned Risk – A governmental pool established to write business declined by carriers in the standard insurance market. Alternative Workers’ Compensation – other than standard workers’ compensation coverage, employer’s liability and excess workers’ compensation (e.g., large deductible, managed care). Affiliate – a person or entity that directly, or indirectly, through one or more other persons or entities, controls, is controlled by or is under common control with the insurer. We provide tools and resources to help regulators set standards and best practices, provide regulatory support functions, and educate on U.S. state-based insurance regulation.
Mobile Homes under Transport – coverage for mobile homes while under transport for personal or commercial use. Minimum Premium Plan – an arrangement under which an insurance carrier will, for a fee, handle the administration of claims and insure against large claims for a self-insured group.
Definition and Examples of an Insurance Premium
This is strictly supplemental coverage and cannot duplicate any benefits provided by Medicare. It is structured to pay part or all of Medicare’s deductibles and co-payments. Medicare Advantage Plan – an HMO, PPO, or Private Fee-For Service Plan that contracts with Medicare Advantage Prescription Drug Plan also includes drug benefits. The plan may provide extra coverage such as vision, hearing, dental, and/or health and wellness programs. Medicare pays a fixed amount for insured’s care every month to the companies offering Medicare Advantage plans.
Allied Lines – coverages which are generally written with property insurance, e.g., glass, tornado, windstorm and hail; sprinkler and water damage; explosion, riot, and civil commotion; growing crops; flood; rain; and damage from aircraft and vehicle, etc. Actuary – business professional who analyzes probabilities of risk and risk management including calculation of premiums, dividends and other applicable insurance industry standards. This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. Easily compare personalized rates to see how much switching car insurance could save you. Insurance deductible, which is the amount you pay before the insurer starts covering the costs of a claim.
What Happens to My Premiums If I Don’t Make a Claim?
As reinsurance premiums are booked separately, we would have expected lower costs. Term life insurance is a type of life insurance that guarantees payment of a death benefit during a specified time period. To pay a premium generally means to pay above the going rate for something, because of some perceived added value or due to supply and demand imbalances. To pay a premium may also refer more narrowly to making payments for an insurance policy or options contract. Options give the holder the right but not the obligation to buy or sell the underlying financial instrument at a specified strike price.
Credit Risk – part of the risk-based capital formula that addresses the collectability of a company’s receivables and the risk of losing a provider or intermediary that has received advance capitation payments. Coinsurance – A clause contained in most property insurance policies to encourage https://accounting-services.net/ policy holders to carry a reasonable amount of insurance. If the insured fails to maintain the amount specified in the clause (Usually at least 80%), the insured shares a higher proportion of the loss. In medical insurance a percentage of each claim that the insured will bear.
Definition of premium
NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for men and women for all ZIP codes in any of the 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information. Asking your insurance representative or an insurance professional to explain the reasons why your premium increases or whether there are any opportunities to get discounts or reduce insurance premium costs will also help you understand whether you are in a position to get a better price and how to do so. When an insurance company’s rates go too high all of a sudden, it is always worth asking your representative whether there is anything that can be done to reduce the premium. The trick to getting the lowest insurance premium is to find the insurance company that is most interested in insuring you. For example, one insurance company may decide that it wants to attract seniors or retirees as clients, while another will price premiums to attract young families or millennials. In the case of health insurance or supplemental health policies, you can take higher deductibles or look at policies with different options like higher co-pays or longer waiting periods.
The company must conform to state regulatory standards to legally sell insurance products in that state. Agent – an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently. Adverse Selection – the social phenomenon whereby persons with a higher than average probability of loss seek greater insurance coverage than those with less risk. Advance Premiums – occur when a policy has been processed, and the premium has been paid prior to the effective date.
These are sample rates generated through Quadrant Information Services. Prepayment Premiums Any prepayment fees and penalties to be paid by the Mortgagor on a Mortgage Loan. Premium Payment Date in respect of any Option, means the date on which the Premium is due and payable, as agreed to at the time the Option is entered into, as evidenced in a Confirmation. First Premiummeans the first premium towards policy along with application form. First Premium on PAC is the only payment option for applications submitted by either SecureDocs or fax. First Premiummeans the premium stipulated in this policy, if the premium is paid in one.
Individual Annuities- Deferred Non-Variable – an annuity contract that provides an accumulation based on funds that accumulate based on a guaranteed crediting interest rate or additional interest rate. Farmowners Insurance – farmowners insurance sold for personal, family or household purposes. This package policy is similar to a homeowners policy, in that it has been developed for farms and ranches and includes both property and liability coverage for personal and business losses. Coverage includes farm dwellings and their contents, barns, stables, other farm structures and farm inland marine, such as mobile equipment and livestock. Environmental Pollution Liability – liability coverage of an insured to persons who have incurred bodily injury or property damage from acids, fumes, smoke, toxic chemicals, waste materials or other pollutants. Auto Liability – coverage that protects against financial loss because of legal liability for motor vehicle related injuries or damage to the property of others caused by accidents arising out of ownership, maintenance or use of a motor vehicle . Commercial is defined as all motor vehicle policies that include vehicles that are used primarily in connection with business, commercial establishments, activity, employment, or activities carried on for gain or profit.
Oxford English and Spanish Dictionary, Synonyms, and Spanish to English Translator
Unearned Premium – amount of premium for which payment has been made by the policyholder but coverage has not yet been provided. Underwriter – person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate. Underlying Interest – the asset, liability or other interest underlying a derivative instrument, including, but not limited to, any one or more securities, currencies, rates indices, commodities, derivative instruments, or other financial market instruments. Subrogation – situation where an insurer, on behalf of the insured, has a legal right to bring a liability suit against a third party who caused losses to the insured. Insurer maintains the right to seek reimbursement for losses incurred by insurer at the fault of a third party. Structured Settlements – periodic fixed payments to a claimant for a determinable period, or for life, for the settlement of a claim.
- Auto insurance premiums are often based on your age, driving record, claims history and vehicle, as well as the amount of coverage you buy.
- This is an interesting facet of insurance premiums, because it may drastically alter rates on a temporary basis, or on a more permanent basis if the insurance company is having success and getting good results in the market.
- Medical & Hospital Expenses – total expenditures for health care services paid to or on behalf of members.
- Mortality Table – chart that shows the death rates of a particular population at each age displayed as the number of deaths per thousand.
- Medical Professional Liability – insurance coverage protecting a licensed health care provider or health care facility against legal liability resulting from the death or injury of any person due to the insured’s misconduct, negligence, or incompetence in rendering professional services.
- Statement Type – refers to the primary business type under which the company files its annual and quarterly statement, such as Life, Property, Health, Fraternal, Title.
- All-Risk – also known as open peril, this type of policy covers a broad range of losses.
The contract provides for the initiation of payments at some designated future date. The contract provides for the initiation of payments at some interval that may vary, however the annuity payouts must begin within 13 months. Preferred Provider Organization – arrangement, insured or uninsured, where contracts are established by Health Plan Companies (typically, commercial insurers, and, in some circumstances, by self-insured employers) with health care providers. The Health Plans involved will often designate these contracted providers as «preferred» and will provide an incentive, usually in the form of lower deductibles or co-payments, to encourage covered individuals to use these providers.
Insuranceopedia Explains Mode of Premium
The amount paid or to be paid by the policyholder for coverage under the contract, usually in periodic installments. A sum of money or bonus paid in addition to a regular price, salary, or other amount. Over the 1990s average marketing costs varied from 3-6 % of premiums across years and in 2001 they ranged from 2.5-4 % across companies.
What is the definition of premium in insurance?
The amount you pay for your health insurance every month. In addition to your premium, you usually have to pay other costs for your health care, including a deductible, copayments, and coinsurance. If you have a Marketplace health plan, you may be able to lower your costs with a premium tax credit.