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.

RELATED TERMS
  1. Advance Premium Mutual

    A mutual insurance company that operates as an advance premium ...
  2. Written Premium

    An accounting term in the insurance business used to describe ...
  3. Developed To Net Premiums Earned

    The ratio of developed premiums to net premiums earned over a ...
  4. Net Premiums Written

    The sum of premiums written by an insurance company over the ...
  5. Adjustable Premium

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

    An insurance policy provision that allows the insurer to deduct ...
Related Articles
  1. Financial Advisor

    Understanding Life Insurance Premiums

    When buying permanent life insurance, what amount of premium should you pay for the coverage?
  2. Insurance

    The Basics of Premium Financing for Life Insurance

    Here's a look at the role premium financing plays in life insurance and how it works.
  3. Financial Advisor

    What Is Mode of Premium?

    Your decision on how frequently to make life insurance payments, or your mode of premium, can have a big impact on your total costs.
  4. Insurance

    Does Buying a Guaranteed Life Insurance Policy Make Sense?

    When does it make sense to buy a life insurance policy that is guaranteed?
  5. Insurance

    Insurance: A Common Personal Finance Pitfall

    Making decisions about insurance can be challenging. But declining coverage altogether comes with it's own risks, and costs.
  6. Financial Advisor

    Advising FAs: Explaining Life Insurance to a Client

    Life insurance was initially designed to protect the income of families, particularly young families in the wealth accumulation phase, in the event of the head of household's death.
  7. Insurance

    How to Choose Permanent Life Insurance Policies

    When does it makes sense to buy a guaranteed rather than a non-guaranteed life insurance policy?
  8. Retirement

    Permanent Life Policies: Whole Versus Universal

    Permanent life insurance combines lifetime insurance with savings to provide lifelong security. Premiums are quite high because they’re partially invested.
  9. Insurance

    How to Prepare for Rising Long-Term Care Premiums

    Long-term care insurance policies are increasing drastically. Here's what can you do about it.
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Promissory Note

    A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on ...
  3. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  4. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  5. Absolute Advantage

    The ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost ...
  6. Nonce

    Nonce is a number added to a hashed block, that, when rehashed, meets the difficulty level restrictions.
Trading Center