premium
A premium is what you pay an insurer, usually monthly or yearly, to keep your cover in force.
In plain English
A premium is the price of protection, and it is one of the few purchases where you hope never to receive anything in return.
The insurer calculates it by estimating how likely you are to claim and how much that claim would cost. A young healthy person pays less for health cover. Somebody insuring a car in a high theft area pays more. A smoker pays more for life cover. None of this is personal. It is arithmetic performed on thousands of people at once.
The temptation is always to shop on premium alone, and it is the commonest mistake in insurance. A cheap policy with wide exclusions is not protection, it is a receipt. You will find this out on the one day it matters, which is precisely the day you cannot fix it.
So read what is covered and what is excluded before you compare prices. Then compare like with like.
And if you stop paying the premium, the cover stops. Not later. Immediately, or after a short grace period. Many Nigerians have learned this by claiming on a policy that had already lapsed, and there is no argument to be had at that point.
You pay ₦15,000 a month for health cover. Two years pass and you claim nothing, and it feels wasted. Then a family admission costs ₦2.5 million and is covered. The ₦360,000 you resented paying bought ₦2.5 million of protection.
Questions people ask
Why did my premium go up?
Usually because the insurer's assessment of the risk changed, or because you claimed, or because costs generally rose. Ask them to explain it, and shop around if the answer is unsatisfying.
What happens if I miss a payment?
Cover typically lapses after a short grace period, meaning you are no longer protected. Claiming on a lapsed policy is a conversation nobody wins.
Can I negotiate my premium?
You can compare providers, raise your deductible to lower it, and remove cover you do not need. All three are worth doing before you renew.
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