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

The payment made to the insurance company for a policy is referred to as a premium. This term specifically signifies the regular amount that the policyholder pays to maintain their insurance coverage. Premiums can be paid monthly, quarterly, annually, or at other intervals, depending on the specific terms of the insurance policy.

Understanding the concept of premiums is crucial because they are essential for keeping the policy active and allowing the insured to receive the benefits outlined in the policy. Without the payment of premiums, the insurance coverage may lapse, meaning that the policyholder could lose their protection and benefits.

The other terms, while related to insurance, refer to different concepts. A deductible is the amount the insured must pay out-of-pocket before the insurance company begins to pay its share. Benefits are the payments or services that the insured receives under the terms of the policy. An endowment refers to a specific type of life insurance policy that pays a benefit after a specified period or upon the policyholder’s death, but it is not related to the regular payment for policy maintenance, which is what a premium represents.