Main Entry: ¹pre·mi·um

Pronunciation: \ˈprē-mē-əm\

Function: noun

Etymology: Latin praemium booty, profit, reward, from prae- + emere to take, buy — more at redeem

Date: 1601

1 a : a reward or recompense for a particular act b : a sum over and above a regular price paid chiefly as an inducement or incentive c : a sum in advance of or in addition to the nominal value of something <bonds callable at a premium of six percent> d : something given free or at a reduced price with the purchase of a product or service
2 : the consideration paid for a contract of insurance
3 : a high value or a value in excess of that normally or usually expected <put a premium on accuracy>