Poistným

Poistným is a Slovak term that translates to "insurance premium" in English. It refers to the amount of money an individual or entity pays to an insurance company in exchange for financial protection against a specific risk or set of risks. This payment is a fundamental component of any insurance contract.

The calculation of poistným typically considers various factors, including the probability of the insured event occurring, the potential financial loss if it does occur, and the administrative costs of the insurance provider. For instance, in car insurance, the poistným would depend on the vehicle's make and model, the driver's history, and the coverage levels chosen. Similarly, for health insurance, it would be influenced by age, health status, and the extent of medical services covered.

Poistným can be paid in various frequencies, such as monthly, quarterly, annually, or as a single lump sum, depending on the insurance policy. Failure to pay the poistným can result in the termination of the insurance coverage, leaving the policyholder unprotected. The concept of poistným is central to the principle of risk pooling, where a large group of individuals contribute financially to cover the losses of a few. Insurance companies use these collected premiums to pay out claims when insured events happen.