An insurance premium is a payment made to a company in return for financial protection for a given period of time.
Insurance premiums can be paid monthly, quarterly, every six months, or annually.
The cost of the insurance premium is based on what the policyholder is being offered financial protection against (i.e. loss of life, an inability to earn, burglary), how likely this is to happen, and how much money the insurance company will pay out if it does happen.
Policyholders can receive substantial discounts on the cost of a premium by paying annually, or by direct debit.