The payment made to the insured for loss incurred is

The payment made to the insured for loss incurred is called "indemnity." Indemnity refers to the compensation that an insurance company pays to the policyholder when they experience a loss or damage covered by their insurance policy. For example, if a person's car is damaged in an accident and they have car insurance, the insurance company will pay for the repairs or replacement of the car up to the policy limit. The purpose of indemnity is to restore the insured to the same financial position they were in before the loss occurred. Indemnity payments can help individuals and businesses avoid financial hardship due to unexpected events or disasters that may otherwise be too costly to cover on their own. Premium, on the other hand, is the amount paid by the policyholder to the insurance company for the coverage provided by the insurance policy. Ex gratia payment is a payment made by the insurance company out of goodwill, and not necessarily because it is legally required. Surrender value refers to the amount that the policyholder can receive if they terminate their insurance policy before the end of the term. Interest refers to the additional amount that the policyholder may earn on their insurance policy over time.