Asymmetrica Glossary

Premium

Also called: instalment, policy premium

The recurring amount you pay the insurer in exchange for the policy's cover and benefits.

Premium is the price of the insurance contract. It can be paid annually, half-yearly, quarterly or monthly. The insurer prices each premium using mortality tables, expected investment returns, expenses and a profit margin; for participating policies, the surplus over conservative assumptions returns to policyholders as bonuses.

Premium-Paying Term (PPT) determines for how many years you pay. A limited-pay endowment like Jeevan Labh lets you finish premium payments well before the policy matures, shifting the payment burden into your high-earning years.

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