In exchange for making these payments, if you experience loss on your insurable assets, your insurer will reimburse you up to a certain limit. Generally, premiums are paid in one lump sum when the policy is first purchased. However, based on the insurance policy terms, they may also be paid in equal semi-annual, quarterly, or monthly installments. A premium is the amount of money you pay to obtain insurance coverage for an insurable asset (like your home, car, valuables, or health).