JAMB UTME - Commerce - 2008

The sum of money paid by a policy-holder to an insurer is referred to as?

interest

premium

gross profit

sales revenue

Akọwa Nkọwa

The sum of money paid by a policy-holder to an insurer is referred to as a premium. In insurance, a premium is the amount of money paid by a policy-holder to an insurance company in exchange for coverage against specific risks or losses. It is usually paid on a regular basis, such as monthly or annually, and the amount of the premium is determined by several factors, including the level of coverage, the type of policy, and the risk level of the policy-holder. For example, if you purchase a car insurance policy, you will typically pay a premium to the insurance company to obtain coverage for potential accidents or damage to your car. The amount of the premium will depend on a variety of factors, such as the type of car you drive, your driving record, and the level of coverage you select. Overall, the premium is the price that a policy-holder pays to an insurance company in order to receive protection against specific risks or losses.






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