What is an insurance premium?
Insurance premium defined Simply defined, an insurance premium is the price of your insurance policy. When you buy home or auto insurance, you sign a contract that says you agree to pay your premium in exchange for a certain amount of coverage from the insurance company.
What are guaranteed cost premiums and why are they popular?
The predictable nature of guaranteed cost premiums make them particularly popular among small and mid-sized businesses. These premiums are not dependent on claims made against the policy, meaning that a sudden surge in requests for compensation will not lead to the insured facing rate increases during the policy period.
What is a level premium?
A level premium is an insurance premium that remains constant throughout the life of the policy. The premium payment only funds a death benefit and there is no savings component in this type of policy. The advantage of a level premium is that it provides stability and predictability for the policyholder.