What does Retrospective Premium mean? Read on to discover the definition & meaning of the term Retrospective Premium - to help you better understand the language used in insurance policies.
A retrospective premium is a payment made by a policyholder to an insurance company that is not based on a fixed amount but, rather, on the claims made during a policy period. The policyholder, however, still makes an initial payment to the insurance company prior to paying the retrospective premium.
More Insurance Terms And Definitions
The Merriam-Webster Dictionary defines insurance as:
b: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.
c: The sum for which something is insured.
We hope the you have a better understanding of the meaning of Retrospective Premium. If you are looking for the meanings of other important insurance terms and their definitions, just click on the letter below to find the words & concepts you are looking for: