What is the sum paid by a policyholder to keep an insurance policy in force called?

The sum paid by a policyholder to maintain an insurance policy is known as a premium. This amount is typically paid on a regular basis—monthly, quarterly, or annually—and is essential for keeping the insurance coverage active and ensuring that the insurer fulfills its obligations under the policy.

Understanding the concept of a premium is important because it serves as the financial foundation for insurance contracts. The premium is determined by various factors, including the level of coverage, the type of policy, and the individual's risk profile. Without payment of the premium, the insurance coverage may lapse, leaving the policyholder unprotected.

The other terms listed refer to different aspects of insurance. A deductible refers to the amount the policyholder must pay out of pocket before the insurance coverage kicks in for a claim. A dividend is a return of premium or profit-sharing that some insurance policies might provide to policyholders. A copayment is a fixed amount that a policyholder pays for a specific service while the insurance covers the remaining cost.