What is the fee called that the insured pays to acquire an insurance policy?

The fee that the insured pays to acquire an insurance policy is known as the premium. The premium is essentially the amount of money that the policyholder agrees to pay to the insurance company for coverage during a specific period. This fee can vary based on numerous factors, including the type of insurance, the amount of coverage, and the risk profile of the insured individual or entity.

In the context of insurance, the premium serves as the required investment that enables the insurer to provide benefits, indemnity, or protection against specified risks. It reflects the cost of transferring risk from the insured to the insurer. Regular premiums ensure ongoing coverage and can be paid monthly, quarterly, or annually depending on the terms of the policy.

Other terms mentioned in the choices have distinctly different meanings. A deductible refers to the portion of a loss that the insured must cover out-of-pocket before the insurer pays the remaining amount. A commission is a fee paid to an insurance agent or broker for facilitating the sale of the policy, and retained earnings are the portion of net income that is retained by a company rather than distributed as dividends to shareholders, which is not related to acquiring a policy. Understanding these definitions helps clarify the unique role the premium plays in the insurance process.