The portion of the premium rate that is designed to cover benefits of the policy, but not expenses, contingencies, or profit. The term is also used to describe the portion of the premium remitted to the home office by an agent after deduction of the agent’s commission.
The actual premium amount credited to a life insurance or annuity certificate. The net premium is equal to the gross premium minus the sales and/or expense charges.
In insurance, the total premium minus dividends.
In insurance, (1) premium paid, minus agent's commission; (2) the original premium, minus any returned premium; (3) the net charge for insurance cost only, minus expenses or contingencies; (4) a participating premium, minus dividends paid or anticipated.
The amount of money needed to provide life insurance benefits for a policy. The net premium is calculated by using only an assumed interest rate and a tabular mortality rate. No loading for expenses is added. The net premium equals a policy's gross premium minus the policy's loading. Under statutory accounting, the net premium funds the benefit reserve. See also gross premium, loading, net benefit premium, tabular interest rate, and tabular mortality rate.----------[ Back
Amount of premium required to provide insurance benefits for a policy.
Premium less expense, such as commission.
1) The gross (paid) premium less any return premium or dividend. 2) The premium less the commission.
Net premium can be either of the following: Amount of premium without agent fee. Amount of premium that would be enough to cover the cost of losses. Amount of premium minus dividends paid or anticipated in participating life insurance when the individual chooses to use his dividends toward payment of the premium.
is the portion of the premium for which the insurance company is responsible. It does not include the part of the premium that covers expenses, contingencies (commissions paid to agents) or profits. Why not profit? Because net premium is only potential profit at this point. The insurance company does not yet know whether it will be paid with this money or if the insurance company will get to keep it once it becomes earned premium.
The amount of money an insurer needs to receive for an insurance policy in order to provide for a product's expected cost of benefits. No loading for expenses is added to this amount. Contrast with gross premium. See also loading.
Property/Casualty] total WRITTEN PREMIUM or EARNED PREMIUM less provision for ceded reinsurance premiums and, on occasion, certain expenses such as commissions; see also GROSS PREMIUM, NET DIRECT PREMIUM; (2) [Health, Life, Pension] see GAAP NET PREMIUM, STATUTORY VALUATION NET PREMIUM
The remaining premium after commission fees are deducted.
(1) The portion of the premium rate which is designed to cover benefits of the policy, but not expenses, contingencies, or profit. (2)The portion of the premium remitted to the home office by an agent after deduction of the agent's commission. (3) Net written premium.
A premium calculated with no allowance for expenses. Same as: RISK PREMIUM, PURE PREMIUM. See also: OFFICE PREMIUM.
The amount of premium minus the agent's commission. Also, the premium necessary to cover only anticipated losses, before loading to cover other expenses.
