What does Return of Premium mean? Read on to discover the definition & meaning of the term Return of Premium - to help you better understand the language used in insurance policies.
Return of Premium
Return of premium is a type of insurance policy in which all or a portion of the amount of premiums paid during a policy period will be returned to the policyholder if claims are not filed, or if the amount of claims filed is smaller than the amount of premiums paid. This type of policy is commonly used in life insurance.
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 Return of 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: