Legal Definitions - deposit premium

DEPOSIT PREMIUM

The deposit premium is the first payment made by an insured person while waiting for the final premium adjustment.

For example, if you purchase car insurance, you may be required to pay a deposit premium when you sign up for the policy. This deposit is usually a percentage of the total premium and is paid upfront. The insurance company will then adjust the final premium based on factors such as your driving record, age, and the type of car you drive. If the final premium is higher than the deposit premium, you will need to pay the difference. If it is lower, you will receive a refund.

Another example is if you purchase a life insurance policy. You may be required to pay a deposit premium when you sign up for the policy. The insurance company will then use this deposit to cover the initial costs of setting up the policy, such as medical exams and underwriting. The final premium will be adjusted based on factors such as your age, health, and lifestyle habits.

The deposit premium is the initial payment made by an insured person to secure an insurance policy. It is usually a percentage of the total premium and is paid upfront. The insurance company will then adjust the final premium based on various factors, such as the insured person's risk profile. The examples illustrate how the deposit premium works in different types of insurance policies and how it is used to cover initial costs and secure the policy.