Paper 2 · November 2004 · Insurance
What is meant by a 'premium' in insurance?
AThe total compensation an insurer pays out to the insured after a loss occurs
BThe maximum sum for which an item may be insured under the policy
CA regular, fixed payment made by the insured into the insurance pool
DThe commission fee an insurance broker charges for arranging the policy
Explanation
A premium is a regular, fixed payment made by the insured into the central pool.
Derived from ZIMSEC Commerce 7103/02 Paper 2, November 2004, Q6