Unearned Premium

Pro Rata Cancellation
Pro rata cancellation refers to the revocation of an insurance policy by an insurance company, which returns to the policyholder the unearned premium without reducing for expenses already paid.
Unearned Premium
An unearned premium is an insurance premium that is paid in advance for coverage that extends beyond the current accounting period. If the policy is canceled before the coverage period ends, the insured is entitled to a refund of the unearned premium.

Accounting Terms Lexicon

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