Consumer Mathematics: Insurance
Premium
The amount paid for insurance cover, calculated from the rates a question gives.
| English | Premium |
|---|---|
| Bahasa Melayu | Premium |
| 中文 | 保费 |
How it is used
A house is insured for RM120,000 at a rate of RM0.50 per RM100 of insured value. The annual premium = (120,000 ÷ 100) × RM0.50 = 1,200 × RM0.50 = RM600.
Where it shows up in SPM
In the Consumer Mathematics: Insurance chapter (Form 5), mostly as a Paper 2 structured question. You are given an insured value and a rate per RM100 (or RM1,000), and asked to compute the premium, then often adjust it for loading, discount, or a co-insurance shortfall.
Don't confuse it with
Open the chapter: Consumer Mathematics: Insurance →
Frequently asked questions
How do I know whether to divide by 100 or by 1,000?
Read the rate carefully. If it says RM0.50 per RM100, divide the insured value by 100 first; if it says RM x per RM1,000, divide by 1,000.
Match the divisor to the wording of the rate, then multiply by the rate.
A question adds a 20% loading to the premium, what does that mean?
Loading is an extra charge for higher risk. Work out the basic premium first, then add 20% of it.
If the basic premium is RM600, the loading is RM120, so the premium payable becomes RM600 + RM120 = RM720.
If I insure something for only half its value, is my premium wrong?
No, the premium is still correct for the sum insured you chose. But under-insuring triggers the co-insurance rule at claim time: a claim is scaled by (sum insured ÷ full value), so you receive less than the loss.