https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ARegular_premium 2026-06-14T06:53:53Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Regular_premium&diff=12321&oldid=prev 2026-03-12T14:10:46Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>🔄 &#039;&#039;&#039;Regular premium&#039;&#039;&#039; is a payment structure in which the [[Definition:Policyholder | policyholder]] pays [[Definition:Premium | premiums]] to an [[Definition:Insurance carrier | insurer]] on a recurring schedule — monthly, quarterly, semi-annually, or annually — over the life of the contract or a defined premium-paying term. This stands in contrast to a [[Definition:Single premium | single premium]] arrangement, where the entire cost is settled in one lump sum at inception. Regular premium structures are ubiquitous across [[Definition:Life insurance | life insurance]], [[Definition:Protection product | protection]], savings, and [[Definition:Health insurance | health]] lines worldwide, and they serve as the dominant payment mechanism for individual policies in most markets.<br /> <br /> 💡 From an operational standpoint, regular premiums create a stream of recurring [[Definition:Cash flow | cash flows]] that insurers must model carefully for [[Definition:Actuarial science | actuarial]] pricing, [[Definition:Reserving | reserving]], and [[Definition:Asset-liability management (ALM) | asset-liability management]]. Because the insurer incurs significant upfront costs — including [[Definition:Commission | commissions]], [[Definition:Underwriting | underwriting]] expenses, and policy issuance costs — that are recouped gradually through the premium stream, persistency assumptions are critical. If policyholders [[Definition:Lapse | lapse]] early, the insurer may not recover its [[Definition:Acquisition cost | acquisition costs]], a dynamic that introduces [[Definition:Lapse risk | lapse risk]] into the product economics. Under [[Definition:IFRS 17 | IFRS 17]], the treatment of regular premiums affects the measurement of the [[Definition:Contractual service margin (CSM) | contractual service margin]] and the pattern of profit emergence, while under [[Definition:Solvency II | Solvency II]] and other risk-based regimes, the projected premium cash flows feed directly into the [[Definition:Best estimate liability | best estimate liability]] calculation.<br /> <br /> 📋 The prevalence of regular premium business shapes distribution strategies and market dynamics in important ways. Products funded by regular premiums tend to be sold through advisory channels — [[Definition:Agency distribution | agents]], [[Definition:Broker | brokers]], and [[Definition:Bancassurance | bancassurance]] partners — where ongoing client relationships support persistency. In markets like India, regulators have historically encouraged regular premium products over single premium ones to promote long-term savings discipline among consumers. For insurers, a large and growing regular premium book generates stable, predictable income and is generally viewed favorably by [[Definition:Rating agency | rating agencies]] and investors because it indicates a durable customer base. The metric known as [[Definition:Annual premium equivalent (APE) | annual premium equivalent]] was developed specifically to allow comparison between regular and single premium production on a level playing field — reflecting how central the regular-versus-single distinction is to understanding a life insurer&#039;s business.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Single premium]]<br /> * [[Definition:Annual premium equivalent (APE)]]<br /> * [[Definition:Lapse risk]]<br /> * [[Definition:Acquisition cost]]<br /> * [[Definition:Premium]]<br /> * [[Definition:Persistency]]<br /> {{Div col end}}</div>

PlumBot