Legal Definitions - net single premium

A net single premium is the amount of money that an insurance policyholder must pay at one time to ensure that there is enough money to pay for any claims made on the policy. This amount is calculated based on the predicted likelihood of certain claims and the expected interest rate. It does not include any additional expenses that may be charged to the policyholder.

For example, if a policyholder wants to purchase a life insurance policy with a net single premium of $10,000, they would pay that amount upfront. This amount is based on the insurer's prediction of the likelihood of the policyholder making a claim and the expected interest rate.

Overall, a net single premium is a one-time payment that guarantees coverage for the policyholder without any additional expenses or fees.