These people and organizations are compensated with a commission that is typically a percentage of the premiums paid by the insured. Most insurance these days is sold through intermediaries like brokers and advisors.
The term dates back to the early days of insurance where lenders who financed an ocean voyage to faraway lands would forgive the loan if the ship was lost at sea due to weather, piracy, or a variety of other disasters for an additional fee-a premium-that they put on top of the original loan amount. Premium is the term used in the insurance industry to refer to the cost or price of an insurance policy. If you have purchased an insurance policy before, you would have paid a premium.
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