What Does Net Premium Mean?

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What does Net Premium mean? Read on to discover the definition & meaning of the term Net Premium - to help you better understand the language used in insurance policies.

Net Premium

Net Premium

Net premium is a term that can have various meanings. One, it refers to the portion of the premium needed to pay for future losses. Two, it also refers to the resulting amount after deducting the agent's commissions from the gross premium. Third, as used in actuarial valuation, it refers to the present expected value of the benefits from a policy minus the present expected value of all future premiums.

We hope the you have a better understanding of the meaning of Net Premium.

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