What is a premium?

A The amount you pay the health insurance company month for coverage.

B The amount you are personally required to pay before your health insurance covers your medical costs.

C A fixed fee you pay for specific medical services.

D The most you have to pay for health insurance in a full year.

Answer: A The amount you pay the health insurance company month for coverage.

Explanation:

The premium charged from individuals is an income for insurance company.

Premium for insurance can be paid on monthly, quarterly or annual basis.

Service fees can be implied on premium sometimes, depending on local insurance laws and insurance providers. Premium can also be taxed. But, all these extra amount does not come under premium category, they are paid above premium.

Some insurance providers asks to pay all amount before insurance coverage starts.

Others may ask to pay in installments.

There are few factors which decide the amount of premium to be paid:

Age Location Previous claims (if any) Type of coverage being taken Moral hazard and adverse selection