Premium

 

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Premium

In the context of insurance, a premium is the regular sum you pay to keep your cover in force.

Premium

The extra amount you pay for a security over and above its intrinsic value. For example: Warrants: the premium on a warrant is calculated as the price of the warrant minus the difference between the exercise price and the price of the underlying asset. So if a warrant costing 8p gives you the right to buy a share at 75p, and that share was currently trading at 70p, the premium would be 3p (8-5). Investment trusts: the premium is the amount by which the share price of the investment trust exceeds its net asset value per share. e.g. If the Net Asset Value is 3.00, and the share price of the trust is 3.30, the trust is trading at a 10% premium to its NAV. In the more common situation where the share price is below the net asset value, the trust is said to be trading at a discount.



Similar Matches

Risk premium

Risk premium

The reward for holding the risky equity market portfolio rather than the risk-free asset. The spread between Treasury and non-Treasury bonds of comparable maturity.


Premium bond

Premium bond

A bond that is selling for more than its par value.


Percentage premium

Percentage premium

Applies mainly to convertible securities. Premium over parity of a convertible bond divided by parity.


Life assurance premium relief

Life assurance premium relief

A tax relief of 15% on the premiums paid into long-term insurance policies. Applies only to policies lasting for more than 10 years and issued before March 13, 1984.


Waiver of premium

Waiver of premium

An arrangement in life insurance, which, in return for some increase in premium, ensures that policyholders have their premiums paid during periods of absence from work due to illness or accident. There is usually an elimination period (or waiting period), UK deferment period, typically several months, after which the insurers commence payments.


Further Suggestions

Conversion premium
Insurance premium
Option premium
Unamortized premiums on investments
Single premium life insurance
High premium convertible debenture
Fixed premium
Liquidity premium
single premium life insurance
equity risk premium
Tender offer premium
Indemnity Guarantee Premium
Term premiums
warrant premium
Risk premium
premium bonds
Forward premium
insurance premium tax
Call premium
insurance premium
Bond premium
Single Premium Deferred Annuity (SPDA)
Risk premium approach
option premium
Waiver of premium


 
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