Which term describes the financial compensation paid to an insurer for the risk covered?

The correct term that describes the financial compensation paid to an insurer for the risk covered is "Premium." In the context of insurance, a premium is the amount of money an insured pays to the insurance company in exchange for coverage. This payment is typically made on a regular schedule, such as monthly or annually, and it provides the insurance policyholder with protection against specified risks.

The premium is calculated based on several factors, including the type and amount of coverage, the insured's risk profile, and other underwriting criteria. It is essential for maintaining the policy, and failure to pay the premium can result in loss of coverage.

Understanding this term is fundamental to grasping how insurance contracts work, as it forms the basis of the financial relationship between the insurer and the insured.