Insurance Expert » Premium in insurance Business http://ic-test.com Always Things Future - Seabloggers INC Sat, 04 Sep 2010 05:12:51 +0000 http://wordpress.org/?v=2.8.6 en hourly 1 About Premium in insurance Business http://ic-test.com/2009/12/30/about-premium-in-insurance-business/ http://ic-test.com/2009/12/30/about-premium-in-insurance-business/#comments Wed, 30 Dec 2009 07:13:54 +0000 admin http://ic-test.com/?p=29 In a contract of insurance, the insurer promises to pay to the policyholder a specified sum of money, in the event of s specified happening. The policyholder has to pay a specified amount to the insurer, in consideration of this promise. ‘Premium‘ is the name given to this consideration that the policyholder has to pay in order secure the benefits offered by the insurance contract. It can be looked upon as the price of the insurance policy. It may be a one-time payment. That is not common. Often, it has to be paid regularly over a period of time.

A default in premium can endanger the continuance of the policy. If that happens, the policy will be treated as “lapsed” and the expected benefits may not be available. The consequences of default are specified in the policy conditions.The calculation of a premium is a complex technical process, involving actuarial and statistical principles. Only trained professionals, called actuaries, do it.

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