Consumer Mathematics: Insurance
Premium
The amount paid, usually regularly, to keep an insurance policy active.
| English | Premium |
|---|---|
| Bahasa Melayu | Premium |
| 中文 | 保费 |
How it is used
A driver pays a motor insurance premium of RM1,080 a year. Paid in 12 equal monthly instalments, each instalment is RM1,080 ÷ 12 = RM90 to keep the policy active.
Where it shows up in SPM
In the Consumer Mathematics: Insurance chapter (Form 5). Paper 1 may ask a quick multiple-choice conversion between annual, monthly or quarterly premiums; Paper 2 uses it in longer questions combining premium, NCD discount and total cost over several years.
Don't confuse it with
Open the chapter: Consumer Mathematics: Insurance →
Frequently asked questions
How do I turn an annual premium into a monthly one?
Divide the annual premium by 12. For example, an annual premium of RM1,080 becomes RM1,080 ÷ 12 = RM90 per month.
For a quarterly figure, divide by 4 instead; always match the divisor to the number of payments in a year.
How does a 25% NCD change the premium I pay?
Subtract 25% of the premium. If the basic premium is RM1,080, the NCD is 0.25 × RM1,080 = RM270, so you pay RM1,080 − RM270 = RM810.
Equivalently, pay 75% of RM1,080 = RM810.
Do I get my premium back if I never make a claim?
No. A premium buys cover for the period, so it is not refunded for going claim-free.
What you gain instead is the No-Claim Discount, which reduces next year's premium. In SPM questions you only compute these amounts, not judge whether a policy is worth buying.