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