What is the term for a payment made to an insurance company to cover policy costs?

The term for a payment made to an insurance company to cover policy costs is "premium." A premium is the amount that an individual or business pays to an insurance company to secure and maintain an insurance policy. This payment can be made annually, semi-annually, quarterly, or monthly, depending on the terms of the policy.

Understanding premiums is essential for anyone involved in managing or purchasing insurance, as it is a fundamental aspect of how insurance policies operate. The premium is typically calculated based on various factors such as the type of coverage, the level of risk, and the individual's or entity's claim history. People pay premiums to ensure that they have financial protection against certain risks, such as health-related issues, property damage, and other unforeseen circumstances.

In contrast, deductibles refer to the amount a policyholder must pay on a claim before the insurance company begins to cover the remaining costs. A co-payment is a fixed amount that a policyholder pays for specific services or medications, while excess refers to the amount above the insured value that the policyholder must pay in the event of a claim. Therefore, the correct understanding of a payment made to the insurance company is captured by the term "premium."