Glossary · Financial Portfolio

What is an insurance premium?

An insurance premium is the amount paid for insurance cover. It is separate from the policy’s cover amount and any excess payable on a claim.

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Plain English. Australian context.

Insurance premium

Know what the term means, what it does not mean and where to go next.

Meaning & context

What it means for your records.

Plain-English information to help you organise your financial picture.

Financial Portfolio editorial team
Australian record-keeping context
Updated 7 October 2026

A simple example

A policy with a A$1,200 annual premium costs that amount for its stated cover period. If an instalment option is quoted at A$110 a month, twelve payments total A$1,320. These are illustrative prices.

What to keep in your records

Keep the premium, payment frequency, cover dates and renewal notice together. Record whether the figure is an annual total or a single instalment so comparisons use the same period.

A common mix-up

The premium is the price of cover, not the amount the insurer will pay after a loss. Read the policy terms and schedule to understand what is covered. Read ASIC Moneysmart’s explanation.

Is the premium the same as the excess?

No. The premium pays for the cover; an excess is an amount you contribute when a relevant claim is made.

Where can I check the meaning of insurance premium?

Use the ASIC Moneysmart source alongside the relevant statement or product documents. The examples here explain the term; they do not recommend a financial product.

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