A premium is a sum of money paid by the insured in consideration for the protection furnished by the insurer. The payment of a premium is not always a necessary prerequisite for the attaching of the liability of the insurer. The promise of the insured to pay, whether express or implied from circumstances, is a valid consideration and will support the contract.4 In the case of Fire Ins. Co. vs. Kuessner,5 the Supreme Court of Illinois said in discussing this question:

4 Wood vs. Poughkeepsie Mut. Ins. Co., 32 N. Y., 619.

5 164 I11., 275.

"A suit to enforce the liability of an insurance company may be brought on the contract for insurance as well as upon the policy. The real cause of action is the same in both the contract and policy. The measure of damages recoverable is the same, and the policy must be based on the contract of insurance, and can contain no element different therefrom. Where an application for insurance is presented to a company stating what is wanted, and the terms, and its officer or any agent having authority to issue a policy says one will be issued on that application, the minds of the parties have met in the execution of a contract and a contract for insurance has been consummated. It is an oral contract. Though proposed in writing, the acceptance by parol and a promise to issue a policy thereon constitute an oral contract. Corporations authorized by their charters to make insurance and issue policies are not precluded from entering into parol contracts to effect the same object. Whatever doubts might have heretofore existed as to the validity of parol contracts of insurance, it is now settled such contracts are valid. Trustees vs. Brooklyn Fire Ins. Co., 19 N. Y., 305; Commercial Marine Ins. Co. vs. Union Ins. Co., 19 How., 321; Ellis vs. Albany City Fire Ins. Co., 59 N. Y., 402; Fire Assn. of Philadelphia vs. Smith, 59 I11. App., 655; Taylor vs. Merchants' Fire Ins. Co., 9 How., 390; Hartford Ins. Co. vs. Farrish, 73 I11., 166.

"The evidence was sufficient to sustain the averments of that court of the declaration declaring on an oral contract. Commercial Ins. Co. vs. Hallock, 3 Dutch, 645.

"It is urged that there is no right of recovery because the premium was not paid before the loss occurred. The evidence shows that appellee, on the morning after the fire, paid the amount owing for insurance and took a receipt therefor. It is insisted that he gave no notice of the loss before paying the premium, and thereby perpetrated a fraud on the insurance company. He owed no duty to disclose the loss before making the payment. His silence neither was to his benefit nor disadvantage. The observation and experience of business men are, that where applications for insurance are made and officers or agents with authority to issue policies have promised to issue the same, then collections of the premiums are not in practice always made a condition precedent. Collections are often left to be made at the close of the month, and unless payment of the premium upon application is made a condition precedent to acceptance, a promise to issue the policy is a consummation of the contract. The mere failure to pay the premium in advance, where an application and a promise to issue a policy are made, will not defeat the right to recover on the contract of insurance, in the absence of a demand for the payment of the premium, made as a condition precedent. Any other rule would only furnish a cloak for fraud. There was here no demand for the payment of the premium before the acceptance of the risk. We, therefore, hold the contract was not rendered invalid by reason of the nonpayment of the premium. Our observation of methods of business causes us to hold the non-payment of the premium, under the circumstances under which the application was made and accepted, did not defeat a recovery on the contract."