What does 'premium' refer to in health insurance?

In health insurance, the term 'premium' specifically refers to the amount that a policyholder is required to pay to the insurance company for their health insurance policy. This payment is usually made on a monthly basis and is essential for maintaining the coverage provided by the insurance plan.

Understanding this term is fundamental because it represents the cost that individuals and families must budget for while managing health care expenses. The premium is distinct from other financial responsibilities associated with health insurance, such as copayments or deductibles, which are costs incurred when utilizing medical services. The premium is a fixed amount that ensures the policy remains active, providing access to healthcare services and protection against unexpected medical expenses.