Premiums

Premiums, in a financial context, are payments made periodically for insurance coverage or similar services. They represent the cost of maintaining a policy, and the amount is determined by factors like risk assessment, coverage level, and policy type. In the market, 'premiums' can also refer to an extra amount charged for a product or service due to its superior quality, exclusivity, or limited availability. Moreover, it could also refer to a bonus given to an employee for exceptional performance.

Premiums meaning with examples

• Our car insurance premiums increased this year because of my recent traffic violation. Despite the increase, we still believe the coverage is essential. We are going to look for a cheaper insurance company, to try and maintain our current coverage for a lower premium cost, so we can pay our bills more easily.
• The company offers health insurance premiums as part of its employee benefits package. The higher the plan tier, the more extensive the coverage and the higher the monthly premiums paid. Paying premiums consistently ensures the employee receives the best health care available. The staff appreciate the stability it gives.
• Due to strong demand and limited supply, the new designer handbag is sold at a premium. Some stores inflate the price of goods when they are in demand, which gives extra profit. The price is not affordable to many people, but those who can pay it will get an exclusive product. The company enjoys an excellent reputation and profit.
• The sales team received bonuses, as well as end-of-year premiums for exceeding their sales targets. This premium boosted their morale, inspiring them to make even more sales. These premiums also help retain talented staff and encourage all-round success. The business always recognises the staff’s value.