Unearned Premium

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Unearned Premium

A premium paid on an insurance policy before it is due. For example, one may pay six months' worth of premiums in January instead of paying each month from January to June. If the policyholder cancels before February, the insurer should refund the premiums for March, April, May and June. For that reason, they are listed as liabilities on the insurer's balance sheet.
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References in periodicals archive ?
The temporary regulations provide guidance to reporting entities receiving premiums, including prepaid premiums, for mortgage insurance and reflect changes to the law made by the Tax Relief and Health Care Act of 2006, EL.
North Carolina Attorney General Roy Cooper charged that The Associates added expensive prepaid premiums to the loans without homeowners' knowledge or understanding, and then financed those premiums at high interest rates over the life of the loan.
If you hold a policy that prepaid premiums for several years, take a few minutes to review your policy with your insurance agent.
In 1985, the trustees canceled the Fund's GILICO policies and requested a refund of the policies' cash values and the unearned and prepaid premiums. The Fund then bought a $25,000 universal life policy from American General Life Insurance Company (AGLIC) for each participant.