What Is a Health Insurance Premium?

Either an individual or a company pays a health insurance premium in exchange for personal or employee health benefits. Individuals who purchase health insurance privately normally pay premiums monthly, quarterly, semi-annually or annually.

For people who participate in employer group policies, employers may pay some or all of the premiums. Premiums that aren't covered by the employer are often deducted from the employee's salary at each paycheck.

Premium payments need to arrive on time to keep health insurance coverage active. A person is obligated to pay premiums for continued coverage regardless of whether the benefits are used. Health insurance premiums are not the only costs for health insurance. There are also co-pays and payment for services not covered by health insurance.