Related Words

Premium: A prepaid payment or series of payments made to a health plan by purchasers, and often plan members, for medical benefits.

Option Premium: When you buy an option, you pay the seller a nonrefundable amount, known as the option premium, for the right to exercise that option before it expires. If you sell an option, you receive a . . . View Full Definition

Share Premium: The extra paid above the face value of a share. Example: if a company issues its shares at $10 each, and later on you buy 1 share on the open market at $12, you will be paying a share premium of $2

Call Premium: Premium in price above the par value of a bond or share of preferred stock that must be paid to holders to redeem the bond or share of preferred stock before its scheduled maturity date.

Premium Raid: An attempt to acquire a large portion of a company's stock to gain control by offering stockholders a premium over the market value for their shares.

Mortgage Insurance Premiums (MIP): Most FHA loans require the borrower to pay two mortgage insurance premiums: one upfront paid at closing, the second is an annual premium based on the loan balance each year.

Insurance Premium: A contract detailing an insurance policy and outlining what risks are insured, what insurance premiums are to be paid by the policyholder, what deductibles prevail, and all the details assoc . . . View Full Definition

Waiver Of Premium: If you have a waiver of premium provision in your long-term care or disability insurance policy, you may qualify to stop paying premiums once you’ve begun collecting benefits. A waiver of pr . . . View Full Definition

Risk Premium: A risk premium is one way to measure the risk you'd take in buying a specific investment. Some analysts define risk premium as the difference between the current risk-free return — defined a . . . View Full Definition

Percentage Premium: Applies mainly to convertible securities. Premium over parity of a convertible bond divided by parity.