Question

The fee charged by insurance companies is commonly known as 'premium'.

• A. True
• B. False

Answer 1

The correct option is A True

Uncertainties have led to the formation of the concept of insurance. 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.