How Do You Spell GROSS PREMIUM?
Pronunciation: [ɡɹˈə͡ʊs pɹˈiːmi͡əm] (IPA) 
Pronunciation: [ɡɹˈə͡ʊs pɹˈiːmi͡əm] (IPA)
A gross premium refers to the total amount of money charged by an insurance company to provide coverage for a specified period of time. It represents the sum of the net premium and any additional costs or fees associated with the policy. The gross premium is the initial payment made by the insured in order to initiate and maintain the insurance coverage.
The net premiums are calculated by insurance companies based on actuarial analysis, taking into account various factors such as risk assessment, probability of loss, and expected claims. However, in addition to this, insurers also include various expenses, such as administrative costs, commissions for agents, as well as a provision for profit margin, which are bundled into the gross premium.
These additional costs are essential for the functioning of the insurance company as they cover various overhead expenses, including but not limited to employee wages, building maintenance, and marketing efforts. They also allow the insurer to generate profits, which are necessary for the company's growth, stability, and ability to pay out claims to policyholders.
It is important to note that the gross premium may include taxes and levies imposed by governmental authorities, depending on the jurisdiction. These additional charges can vary from one region to another and are often regulated by local laws.
In summary, the gross premium represents the total amount of money an insured person or entity pays to an insurance company, including the net premium and additional costs associated with the policy. It covers both the actual cost of insurance coverage and the necessary expenses of the insurer.
The sum of the net p. and the loading, constituting the actual premium paid by the insured.
A practical medical dictionary. By Stedman, Thomas Lathrop. Published 1920.
The word "gross premium" is derived from Middle English and Latin roots.
The term "gross" comes from the Old French word "gros" meaning "coarse" or "large". In Middle English, it was used to describe something in its entirety or as a whole. Over time, "gross" came to refer to the total amount, including all components.
The word "premium" originated from the Latin word "praemium", which meant "reward" or "prize". In the early usage, it referred to a payment or bonus given in addition to a normal wage or salary.
When combined, "gross premium" refers to the total amount or sum of money paid for insurance coverage before any deductions or adjustments are made. It represents the complete cost of the insurance policy without considering any expenses or commissions.
