Glossary
Insurance premium
An insurance premium is the amount a policyholder pays to an insurer, usually monthly or annually, to keep a life insurance policy in force.
Insurance premium explained
The premium is the price of the cover. For a life insurance policy it is normally paid at a fixed frequency, for example K100 every month, for as long as the policy term runs or until the insurer's rules say premiums can stop.
How the premium is worked out depends on the product, the sum assured, the policyholder's age, health, gender and lifestyle factors such as smoking, and the length of the policy. Two people buying the same product can therefore pay different premiums.
If premiums are not paid, most policies give a grace period and then lapse, which means the cover stops. Exact rules on grace periods and reinstatement vary by insurer and product, so the policy document is the final reference.
Why it matters in life insurance
In Zambia most life insurance premiums are small, regular payments collected from individuals, often through Mobile Money or payroll deduction, so the way premiums are billed, collected and reconciled decides whether a policy stays active. In Ontech LifeI ERP, each policy carries its own premium schedule and every collected premium is matched to it automatically.
Related terms
Premium collection · Policy lapse · Sum assured · Policyholder