In medical insurance, what does the term 'premium' refer to?

The term 'premium' in medical insurance specifically refers to the amount that the policyholder pays to the insurance company to maintain their health coverage. This payment is usually made on a regular basis, such as monthly, quarterly, or annually, and is essential for keeping the insurance policy active. The premium represents the financial commitment the insured individual makes to ensure they have access to healthcare services as outlined in their policy.

This amount is separate from other costs associated with medical services, such as co-payments or deductibles, which are additional out-of-pocket expenses incurred when receiving care. Understanding this distinction is important, as it helps policyholders manage their overall healthcare costs effectively.