Premium Meaning in Legal

Buying multiple options can increase or decrease the risk profile of the position, depending on how it is structured. Accelerate all aspects of your legal work with tools that help you work faster and smarter. Win cases, close deals and grow your business, while saving time and minimizing risk. Premium has several meanings in finance, the first being the total cost of buying an option. A premium is also the difference between the price paid for a fixed-income security and the nominal amount of the security in question. Finally, the premium is also the fixed amount of payment that an insurer regularly needs to provide coverage under a particular insurance plan for a given period. In practice, however, the premium is not always paid at the time of purchase of the policy; Insurance policies are often taken out by brokers and open accounts are held between them and insurers, in which they are debtors of all premiums, and sometimes banknotes or bills of exchange are given for the amount of the premium. The first default in premium payment by a policyholder is called the first unpaid premium. Description: Each premium payment is accompanied by a receipt indicating the next premium payment due date. If the premium is not paid, this date becomes the date of the first unpaid premium.

See also: New business risk assessment, return, annuity, insurable interest, insurability, also known as underwriting, is the methodology used by insurers to assess the risks associated with an insurance policy. The same helps calculate the right premium for an insured. Description: There are different types of risks associated with insurance, such as changes in mortality rates, morbidity rates, disaster risks, etc. The concept of bond premium is directly related to the principle that the price of a bond is inverse to the interest rate; If a fixed-income security is purchased at a premium, it means that the interest rates then in effect are lower than the bond`s coupon rate. The investor thus pays a premium for an investment that yields an amount higher than the existing interest rates. Premiums are paid for many types of insurance, including health insurance, landlords, and rental insurance. A common example of an insurance premium comes from auto insurance. A vehicle owner can insure the value of their vehicle against losses due to accident, theft, fire, and other possible problems. When awarding a lease, sometimes part of the rent is capitalized and paid as a lump sum at the time of rental. This is called a premium.

The owner usually pays a fixed amount of premiums in exchange for the insurance company`s guarantee to cover economic losses incurred under the agreement. Premiums depend on both the risk associated with the insured and the desired amount insured. Compensation payments to one party by the other party for the loss suffered. Description: Compensation is based on a reciprocal contract between two parties (one insured and the other the insurer) in which the loss is compensated against payment of premiums. See also: return, annuity, insurable interest, insurability Option premiums are the cost of purchasing an option. Options give the holder (owner) the right, but not the obligation, to buy or sell the underlying financial instrument at a specific strike price. The premium of a bond reflects changes in interest rates or risk profile since the date of issue. The buyer of an option has the right, but not the obligation, to buy (call) or sell (put) the underlying instrument at a specific strike price for a specific period of time. The premium paid is its intrinsic value plus its time value; A longer-term option always costs more than the same short-term structure. Market volatility and the proximity of the strike price to the prevailing market price also affect the premium. PREMIUM, contracts.

The consideration paid by the insured to the insurer for the purchase of insurance. It is so called because it is paid first, or before the contract takes effect. Poth. H.T. No. 81; Mballo. Inst. 234. 2.

In practice, however, the premium is not always paid at the time of taking out the policy; Insurance policies are often taken out by brokers and open accounts are held between them and insurers, in which they are debtors of all premiums, and sometimes banknotes or bills of exchange are given for the amount of the premium. 3. English The authors, when talking about the consideration for maritime loans, use a variety of words to distinguish them according to the nature of the case.