When an option is in the money (ITM) its premium consists of two different components: Time value and intrinsic value. Intrinsic value is the amount that the option is in the money and time value is the rest. Let’s take for example a call in MSFT with strike price $25, expiration after six months and premium $3.80. If the price of MSFT is at $28 then the premium has an intrinsic value of $28-$25=$3/share. What is the remaining $0.80? It is the time value of the call which incorporates the possibility that the option will be in the money after six months.

So intrinsic value is a premium component of ITM options. Because all options have some value before their expiration date the premium of those which are out of the money (OTM) or at the money (ATM) consists only of time value.

The more time until expiration the more the time value of the premium will be, because the possibility of an option to be ITM is higher when it is far from its maturity and this is priced in its premium.

Conclusively, all premiums have time value until their expiration irrelevantly if they are ITM, OTM or ATM, but the premium of ITM options has also intrinsic value.