Premium Tax
Updated: 14 May 2026
What Does Premium Tax Mean?
A premium tax is a tax that insurers are required to pay on the premiums they receive from their policyholders. The tax rate varies by state, so the amount insurers must pay for premium taxes can differ significantly across regions.
Insuranceopedia Explains Premium Tax
Premium taxes are just one of many government regulations that insurance companies must comply with. Understanding the amount they will need to pay in premium taxes is a crucial part of their financial planning. Insurers fold this cost into the rates customers eventually pay, which is part of how business insurance premiums are calculated and one of the factors that affect life insurance premium pricing.