premium

(general) The amount above a regular price, paid as an incentive to do something. For example, a buyer might pay a premium for quick delivery. Opposite of discount.
(foreign exchange) (a) Premium, markup (forward premium) or contango of a forward rate against the spot rate. (b) The price at which an option sells.
(insurance) A fee paid by the insured to the insurer in consideration for insurance covered by an insurance policy. Underwriters calculate risk and the premiums required to insure against it based upon the probability of the event occurring and the possible extent of the resulting damage or loss. The higher the probability and the higher the potential damage, the greater the premium.
The receipt of premiums by the insurer will legally bind the insurance contract. Late or “lapsed” premiums generally void the contract. Premium payments may have a “grace period” during which they can be paid after the stated due date, but this cannot be assumed.

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