What is liquidity premium in finance?

Also known as the illiquidity premium, this refers to the additional return that an investor can earn from any investment that cannot be immediately liquidated for cash in the market. Risk-averse investors generally try to avoid investing in highly illiquid assets like real estate due to the time it takes to sell these assets. This causes successful investors in illiquid assets to earn a much higher return than other investors who prefer to invest only in highly liquid assets. By the same logic, since most investors would be willing to invest in highly liquid assets, the returns from such investments generally turn out to be lower than the returns from illiquid investments.

Source: The Hindu, 7/02/2019