Question

State the following statement is True or False:

The amount payable by the insured to the insurer in installments for protection against risk is premium.

• A. True
• B. False

Answer 1

The correct option is A True

Insurance is a contract where one party agrees to indemnify the loss of other party at the time of loss, for a consideration. Such consideration is generally called as 'premium'. It is the fee charged by insurance companies on the value insured. Premium is paid in installments to the insurer at regular intervals.