An insurance premium is the amount you pay to an insurance company to keep your policy active. It can be paid monthly, quarterly, or annually. The premium amount depends on factors like coverage type, and age.
In this glossary, you’ll understand everything about insurance premiums, what they mean, how they’re calculated, current GST updates in India (2025), and average costs for medical and health insurance plans.
An insurance premium is the amount an individual or business pays regularly to an insurance company to maintain active coverage, such as life, health, or medical insurance. In India, as of September 2025, GST on individual life and health insurance premiums has been fully exempted, making policies more affordable for customers.
A premium in insurance is the cost a policyholder pays monthly, quarterly, or annually to keep the policy valid. It serves as the insurer’s primary source of income and is calculated based on factors like age, health, location, lifestyle, coverage amount, and risk profile.
A single premium means you pay the entire premium amount in one go for the whole policy term. You don’t need to worry about periodic payments just one lump-sum payment at the start.
A regular premium is paid at fixed intervals monthly, quarterly, half-yearly, or annually for the duration of the policy. This is the most common payment method for health and life insurance plans.
A level premium means you pay the same premium amount throughout the entire policy term. The insurer calculates an average rate considering your increasing age and risk over the years, so your premium stays constant.
A flexible premium allows you to adjust your premium amount during the policy term usually in certain types of policies like ULIPs (Unit Linked Insurance Plans) or corporate group plans. You can increase the premium to get higher coverage or reduce it if your needs change.
For quick calculations, try Pazcare’s health insurance premium calculator.
Premiums differ based on personal risk factors like age, medical history, and lifestyle choices such as smoking or alcohol use.
Yes. Choosing a higher deductible, maintaining good health, or bundling multiple policies can help reduce your premium am
You can choose how you want to pay your insurance premiums. Some insurers allow the policyholder to pay the insurance premium in installments—monthly or semi-annually—while others may require an upfront payment in full before any coverage starts.
No. The workmen compensation insurance policy tariff varies based on the risk profile of the industry. High-risk jobs like construction, mining, and shipping attract higher premiums compared to low-risk office jobs.
Your employer pays the premium for your group health insurance plan.
Yes, sum insured has an impact on your premium i.e higher the sum insured you opt for, the higher premium you are required to pay.
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