Explain Earned premium
Earned premium Technical Terms
Earned premium: Insurance policies usually run for a period of 12 months. An insured can cancel a policy at any time and request a refund of premium. Therefore, insurers must only take into the books of account that portion of premium which corresponds to actual elapsed time on risk. That portion of premium which can be taken up in the accounts is called earned premium. That portion of premium yet to expire is termed unearned premium.