Advance Premium
What Does Advance Premium Mean?
The advance premium is a payment made by the insured to the insurance company before the specified payment date. It can also refer to the initial payment for a policy, where the actual premium amount has not yet been determined.
Insuranceopedia Explains Advance Premium
Payment made in advance or before the scheduled payment date may be incentivized by the insurance company, often offering a discount on the actual premium price to the policyholder.
It can also refer to the first payment for a policy, which is based on an estimate since the valuation of the coverage has not yet been completed. This payment is made to bind the insurer to the insured. Adjustments or the actual premium amount are provided in the notice for the second premium payment. This is also referred to as the deposit premium.
