PremiumIn the context of insurance, a premium is the regular sum you pay to keep your cover in force.
PremiumThe 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.
Risk premiumRisk 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 bondPremium bond
A bond that is selling for more than its par value.
Percentage premiumPercentage premium
Applies mainly to convertible securities. Premium over parity of a convertible bond divided by parity.
Life assurance premium reliefLife 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 premiumWaiver 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 SuggestionsConversion premium
Unamortized premiums on investments
Single premium life insurance
High premium convertible debenture
single premium life insurance
equity risk premium
Tender offer premium
Indemnity Guarantee Premium
insurance premium tax
Single Premium Deferred Annuity (SPDA)
Risk premium approach
Waiver of premium