What is an insurance premium?

Dr. Michael Roizen, MD
Internal Medicine

An insurance premium is a set dollar amount that you pay to the insurer, typically on a monthly basis, so that the insurance company continues to provide benefits for the amount of time specified in your contract. Premiums can change annually, but you will be notified (hopefully!) before this happens.

In some cases (when you pay for private insurance all on your lonesome), you have to cover the full cost of the premium. However, if you have employer-sponsored health insurance or get it through a union or trade organization, you typically only have to cover part of the monthly insurance premium bill. 

If you’re not sure how much dough to cough up each month, consult your Summary Plan Description (SPD), get in touch with your benefits office, or call the insurer.

Continue Learning about Health Insurance

How to Break the Health Insurance-Stress Cycle
How to Break the Health Insurance-Stress Cycle
The plot of the TV series Breaking Bad hinged on the premise that overwhelming stress caused by out-of-pocket costs for cancer treatment could turn a ...
Read More
What are consumer-directed health plans?
A consumer-directed health plan (CDHP) is designed to raise awareness of healthcare costs and put mo...
More Answers
Is medical underwriting in individual health insurance legal?
American Diabetes AssociationAmerican Diabetes Association
States regulate the individual health insurance market. The rules as to who can purchase and what is...
More Answers
How Is Your Insurance Company Model Different?
How Is Your Insurance Company Model Different?

Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.