An insurance premium is the amount of money an individual or business pays for an insurance policy. It is the price you pay to buy an insurance policy, and it is the amount you pay to your insurer regularly to keep a policy in force. The premium amount is determined by many factors, including risk, coverage amount, and more, depending on the type of insurance you have. You may be able to pay premiums monthly, quarterly, every six months, or annually, depending on your insurance company and your specific policy. If you do not pay your insurance premium, your policy will be canceled, and you will not have financial protection for claims.

Once earned, the premium is income for the insurance company. It also represents a liability, as the insurer must provide coverage for claims being made against the policy. Failure to pay the premium on the individual or the business may result in the cancellation of the policy and a loss of coverage. Some premiums are paid quarterly, monthly, or semi-annually, depending on the policy. Shopping around for insurance may help you find affordable premiums.

The price of the premium depends on the type of insurance you buy, such as life, renters, auto, or homeowners. Auto insurance premiums are often based on your age, driving record, claims history, and vehicle, as well as the amount of coverage you buy. Life insurance premiums typically factor in your age, health, and life expectancy, along with the coverage limits you choose. The deductible you pick also typically affects your premium, depending on the type of policy. Your deductible is the amount you must pay toward the costs of an insured loss before your insurance company makes a payment[[6]](https://www.farmers.com/learn/insurance-questions/what-...