In life insurance, what does the term "premium" refer to?

The term "premium" in life insurance specifically refers to the amount that the policyholder pays to the insurance company in exchange for the coverage provided by the policy. This payment is typically made on a regular basis, such as monthly or annually, and amounts to the cost of maintaining the life insurance policy. The premium is crucial because it determines the policy's active status and the benefits that the insured and the beneficiaries will receive.

Understanding the premiums is essential for policyholders as it affects their budgeting and can influence their choice of policy based on how much coverage they can afford. The other options describe aspects of life insurance but not the premium itself. For instance, the amount received by the beneficiary upon the policyholder's death pertains to the death benefit, while the total sum insured refers to the overall coverage amount. The duration of the policy coverage indicates how long the policy is active but does not relate to the concept of premium.