Earned Premium

10 months ago

Insurance Glossary Team

1 minute

Plain English Definition: Earned Premium is the portion of an insurance premium that an insurer has earned by providing coverage for a certain period.

What Earned Premium really means for someone with an insurance policy

This term refers to the amount of premium kept by the insurer based on the elapsed coverage period.

Earned Premium Real World Examples

After six months of a one-year policy, the insurer has earned half the annual premium.
If a policy is canceled mid-term, the insurer retains the earned portion up to that point.
Monthly premium installments reflect the earned amount as coverage continues.