Advance Premium

AAA

DEFINITION of 'Advance Premium'

The initial premium paid to bind an insurance policy for a given period of time. The most commonly known use of the term "advance premium", is with respect to fluctuating insurance payments, such as payroll-based policies, where the actual amount due is not known until after the fact.

INVESTOPEDIA EXPLAINS 'Advance Premium'

Advance premium can also refer to pre-paid premiums, where the policyholder makes a premium payment before it is due.

RELATED TERMS
  1. Earned Premium

    The amount of total premiums collected by an insurance company ...
  2. Premium Income

    1. In investing, income that is earned through the sale of an ...
  3. Advance Premium Fund

    Insurance companies who receive advance premiums must account ...
  4. Advance Premium Mutual

    A mutual insurance company that operates as an advance premium ...
  5. Adjustable Premium

    An insurance premium that can move up or down over time based ...
  6. Premium

    1. The total cost of an option. 2. The difference between the ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  2. Home & Auto

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  3. Retirement

    What To Do If Your Insurance Won't Pay

    Before paying for coverage, find out what you need to do to ensure you get paid.
  4. Home & Auto

    Introduction To Insurance

    Having the right kind of insurance is a critical component of any good financial plan.
  5. Retirement

    Healthcare: What Are You Really Paying For?

    Long-term care costs rise fast and long-term care providers bundle services together, making it tougher for families to understand what they are paying for
  6. Retirement

    4 Myths You Don’t Know About Medicare

    Here are four common misconceptions about Medicare, the federal government’s health insurance program for people who are 65 and older or disabled.
  7. Professionals

    Does the Middle-Class Need LTC Insurance?

    Long-term care insurance is as expensive as it is necessary for many people, but is it right for all financial advisor clients?
  8. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  9. Insurance

    Which States Have the Cheapest Home Insurance?

    You can't choose where you live by its insurance rates. But if you did, these are the states to pick.
  10. Insurance

    Obamacare Penalty: What Actually Happens (& When)

    If you didn't have health insurance last year – or miss this year's deadline – how is the Affordable Care Act penalty enforced?

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center