The article may contain affiliate links from partners. The words, opinions, and reviews are our own. Learn how we make money to support our financial wellness mission.
The portion of a policy premium that has been used to actually buy coverage, or that the insurance company has “earned.” For instance, if a policyholder has a six-month policy that was paid for in advance, two months into the policy, there would be two months of earned premium. The remaining four months of premium is “unearned premium.”