Earned Premium

That portion of the premium for which policy protection has already been given. For example, if you buy a one year Health policy for a premium of $1,200 and the insurer cancels you exactly six months later, they are entitled to keep $600 (the earned premium), but they must also refund you $600, which is called the “unearned” premium. If they covered you for the entire year, all the premium would be earned. This concept also applies to P&C insurance, but not to Life insurance, where all premiums are considered to be fully “earned” upon payment.