What is the meaning of a premium in health insurance?

In health insurance, a premium refers to the regular payment made by an individual or entity to maintain their insurance policy. This payment is usually made on a monthly, quarterly, or annual basis. Paying the premium is essential as it keeps the insurance coverage active and allows the policyholder to be eligible for benefits when needed, such as medical services, hospital visits, or prescription drugs.

The premium is distinct from other cost-related terms in health insurance. It is not a payment for specific services nor an amount required as a deductible before benefits kick in. Instead, it is the ongoing investment made to secure access to health coverage, ensuring that policyholders are protected against high medical costs that could arise from illnesses or accidents.