Premium is the amount which is paid by the life assured to the insurance company which has accepted the risk under the policy. The premium is the monetary value of the risk, contingent upon the duration of human life and accepted by the insurer. The premium is the consideration against the payment to which the insurance has undertaken the risk. The premium is broadly classified in to two type viz., 1) Net premium; and 2) Gross premium. Let us discuss about those premium. The Net premium is the simple premium. It is determined by finding the mortality costs for a group of entrants. The Gross premium is the amount that the life assured is required to pay.
Friday, April 24, 2009
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