Question

Insurance premiums are payable in advance but the insurance company does not fully earn them until the policy period expires is termed as?

A Affinity sales Correct Answer Incorrect Answer
B Demutualization Correct Answer Incorrect Answer
C Annuitization Correct Answer Incorrect Answer
D Earned Premium Correct Answer Incorrect Answer
E None of these Correct Answer Incorrect Answer

Solution

Earned premium is a pro-rated amount of paid-in advance premiums that has been "earned" and now belongs to the insurer. The amount of the earned premium equates to the sum of the total premiums collected by an insurance company over a period of time.

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