Definition
The amount you pay, usually monthly, to keep an insurance policy active, whether or not you use it.
What it means
A premium is the price of insurance coverage. For health insurance, you pay it every month to keep the plan, even if you never see a doctor, and it is separate from the deductible, copayments and coinsurance you pay when you get care. Employers often pay part of the premium for workplace plans and take your share out of your paycheck, sometimes before tax. Marketplace plans may come with a premium tax credit that lowers the monthly amount. For car, home and life insurance, premiums depend on factors such as coverage level, deductible, location and claims history, and in many states credit-based insurance scores. Missing premium payments can end your coverage after a grace period. Plans with lower premiums often have higher deductibles.
Example
Plan A costs $350 a month with a $1,500 deductible; Plan B costs $250 a month with a $5,000 deductible. Plan B saves $1,200 a year in premiums but could cost $3,500 more if you reach the deductible.
Illustrative numbers only. Your situation will differ.