What term refers to the monetary compensation one must pay to maintain an insurance policy?

The term that refers to the monetary compensation one must pay to maintain an insurance policy is known as the premium. This amount is typically paid on a regular basis, such as monthly or annually, to keep the insurance coverage active. The premium is a crucial part of an insurance contract, as it represents the financial commitment from the policyholder to ensure they have coverage for various risks.

Other related terms can often be confused with the concept of a premium. For instance, a deductible refers to the amount of money that the policyholder must pay out-of-pocket before the insurance company starts to pay its share. The rate generally refers to the cost of the insurance coverage determined by various factors such as risk assessment and coverage options. Co-payment is a specific fee that the insured pays at the time of receiving a medical service, which is a different aspect of insurance costs. Each of these terms plays an important role in the overall insurance framework but specifically, the premium is what secures the policy for the insured individual.