What term describes the payment made for an insurance policy?

The term that describes the payment made for an insurance policy is "premium." A premium is the amount of money that an individual or business pays to an insurance company in exchange for coverage and protection against potential financial losses. This payment can be made on a monthly, quarterly, or annual basis, depending on the terms of the policy.

In the context of insurance, the premium serves as the contract between the insured and the insurer, where the insured agrees to pay a specified amount in return for the insurer's commitment to provide financial support in events covered by the policy, such as accidents, illnesses, or property damage. The calculation of premiums can depend on various factors, including the type of insurance, the risk profile of the insured, and the overall cost of the coverage provided.

Understanding the concept of a premium is essential for anyone engaging with insurance products, as it directly impacts the financial commitment involved in obtaining coverage.