What does "premium" refer to in health insurance?

In health insurance, the term "premium" specifically refers to the amount paid regularly—typically monthly or annually—to maintain health insurance coverage. This payment is necessary for the policy to remain active, and it ensures that the insured has access to the benefits provided by their health insurance plan.

Understanding the premium is crucial because it represents a fixed cost associated with obtaining health insurance, varying based on factors such as the insurer, the policyholder's health status, and the level of coverage chosen. The premium does not include other costs such as deductibles or out-of-pocket expenses; rather, it is the first step in establishing coverage and is required regardless of usage of medical services.