Origin: Latin prefix pre-
Premium has 8 different meanings across 2 categories:
payment for insurance
"After reviewing my policy, I noticed that adding comprehensive coverage would increase my monthly premium significantly."
the amount that something in scarce supply is valued above its nominal value
"they paid a premium for access to water"
a fee charged for exchanging currencies
"When I tried to convert my euros into dollars at the airport, they added an extra premium on top of the exchange rate."
a prize, bonus, or award given as an inducement to purchase products, enter competitions initiated by business interests, etc.
"they encouraged customers with a premium for loyal patronage"
A prize or award.
"The team celebrated their victory by receiving a gold premium for finishing first in the competition."
In plain English: A premium is an extra fee you pay to get better protection or features than what comes with the basic version.
"The premium for insuring an expensive car is much higher than for an older model."
Usage: In modern usage, premium almost never means a prize; instead, it refers to an extra cost paid for a higher quality product or service. Use this word when describing the additional fee required to get a superior version of something, such as health insurance with better coverage.
Superior in quality; higher in price or value.
"We decided to skip the standard loaf and buy the premium bread because its texture was noticeably softer and it cost a few dollars more."
In plain English: Premium means something that is better quality and costs more money than regular items.
"The premium brand coffee tasted much better than the generic one."
Usage: Use premium to describe goods or services that are of superior quality and command a higher price than standard options. Do not use it simply to mean expensive, as the term implies a better product justifies the extra cost.
The word premium comes from the Latin praemium, which originally meant a prize or reward. It traveled into English to describe something of high value or superior quality.