Premium

An amount paid on a regular schedule by a policyholder that maintains insurance coverage.

Source: U.S. Department of Housing and Urban Development

(1) The payment an option buyer makes to the option writer for granting an option contract; (2) the amount a price would be increased to purchase a better quality commodity; (3) refers to a futures delivery month selling at a higher price than another, as "July is at a premium over May."

Source: Commodity Futures Trading Commission

A periodic payment by an insured to an insurance company in exchange for insurance coverage.

Source: Missouri Department of Insurance

Last reviewed October 2022