What term refers to the fee a person pays to an insurance company for coverage?

The term that refers to the fee a person pays to an insurance company for coverage is known as a premium. This payment is typically made on a regular basis, such as monthly or annually, and it secures a policyholder's access to the benefits provided by their insurance plan. The premium amount can vary based on several factors, including the type of coverage, the individual's risk profile, and the insurer's pricing structure.

In the context of life insurance, the premium is crucial because it represents the financial commitment required to maintain the policy in force and ensure the beneficiaries receive the intended benefits upon the policyholder's passing. Understanding how premiums work is essential for anyone engaging with insurance products, as it directly affects budgeting and coverage decisions.