In insurance, what term refers to the monetary amount paid for coverage under a policy?

The term that refers to the monetary amount paid for coverage under a policy is "premium." In the context of insurance, the premium represents the price an insured person or entity agrees to pay in exchange for the financial protection provided by the insurance policy. This amount is typically set based on various factors, including the insured's risk profile, the type of coverage offered, and market conditions.

Premiums are essential because they help insurers collect the necessary funds to cover potential claims that may arise under the policy. The amount of the premium can vary significantly depending on the coverage limits, deductibles, and the overall risk associated with the insured item or individual. Understanding premiums is fundamental for both agents and clients, as it directly impacts the affordability and accessibility of insurance protection.