Show Definition:Annualized premium is the total amount paid in a year’s time to keep the life insurance policy in force. The annualized premium amount of a life insurance policy does not include taxes and rider premiums. Description:When you buy a life insurance policy, you can choose the premium paying mode/ frequency like monthly, quarterly, half-yearly, or yearly. The annualized premium is the addition of all the premiums paid in every payment frequency in a policy year. Example:Mr. Arun purchased a term insurance policy for which he has to pay ₹1,000 every month excluding tax. So the annualized premium of his term insurance policy is ₹1,000 * 12 = ₹12,000. Back ADV/4/22-23/120 Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Insurance
Definition: Premium paying term is the total number of years for the policy holder to pay the premium. Definition: Policy term is normally equal to the premium paying term. However, some insurance policies give the insured the autonomy to choose a premium paying term lower than the policy term. For instance, insurers allow the insured to get the insurance benefits even if they stop the premium payments after a stipulated period of time by converting the normal insurance policy into a paid up policy. Here the sum assured will be calculated by using the formula. (Total number of premiums paid/Total number of premiums payable) X Sum Assured + vested bonus (if any) Also See: Life Assured, Non-Standard Life, Premium, Adverse Selection, Subrogation, Paid-Up Policy, Mitigation
Related NewsSuggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium. The premium is a function of a number of variables like age, type of employment, medical conditions, etc. The actuaries are entrusted with the responsibility of ascertaining the correct premium of an insured. The premium paying frequency can be different. It can be paid in monthly, quarterly, semiannually, annually or in a single premium. Also See: Life Assured, Non-Standard Life, Premium Paying Term, Adverse Selection, Subrogation, Paid-Up Policy, Mitigation
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What happens to premium paid in term insurance?A regular term insurance plan pays the sum assured on the death of the insured. There are no payments besides the sum assured. With a TROP, the nominees are paid the sum assured in the event of the insured's death. But if the insured survives the policy term, they get back all the premiums paid over the policy tenure.
What are the effects of payment of premium?Payment of the premium under the provisions of the preceding paragraph shall give rise to the contract being brought back into force, and provision may be made to the effect that payment entails cover of the risk between the due date and the date of payment of the premium.
What is premium paid to the policy?Definition: Premium is an amount paid periodically to the insurer by the insured for covering his risk. Description: In an insurance contract, the risk is transferred from the insured to the insurer. For taking this risk, the insurer charges an amount called the premium.
When full premium is returned to the insured it is called?A return of premium rider provides for a refund of the premiums paid on a term life insurance policy if the policyholder doesn't die during the stated term. This effectively reduces the policyholder's net cost to zero. A policy with a return of premium provision is also referred to as return of premium life insurance.
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What happens to the total amount of premium paid for an insurance policy when the payment frequency
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