Definition
The recurring price of an insurance policy. Compare policies on the worst case (premium plus out-of-pocket maximum), not the monthly price alone.
Why it matters
The cheapest premium is often the most expensive policy once a real claim happens. Pricing the worst case is the only honest way to compare coverage.
Example
Plan A costs $300 a month with a $9,000 out-of-pocket max; Plan B costs $450 with a $3,000 max. In a bad year, A costs up to $12,600 and B up to $8,400: the pricier premium is the cheaper worst case.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.