Which of the following best describes the term 'insurance premium'?

The term 'insurance premium' refers to the amount paid periodically for insurance coverage. This is a fundamental concept in the insurance industry, as the premium is what policyholders must pay to obtain and maintain their insurance protection. It can be paid on various schedules, such as monthly, quarterly, or annually, depending on the specific policy agreement.

Understanding this concept is crucial for those in the funeral service field, as many funeral homes and services rely on insurance products to help families cover the expenses associated with funerals. Knowing how premiums work allows funeral service professionals to assist families in planning for these costs and understanding their insurance options better.

The other options represent different aspects of insurance: claims relate to the payment received when a policyholder files for assistance, coverage limits pertain to the maximum amount an insurer will pay under a policy, and surplus amounts from unclaimed policies do not directly correlate with the definition of a premium. Thus, option B accurately captures the essence of what an insurance premium is.