Pro Rata Premium For Insurance Policies
This is a premium based on the length of time the insurer was actually at risk.
Usually it is used to describe the few days that fall within the month before payment of the premium started.
Cover on a policy or item start on 20 June.
The monthly premium for the item/policy is R500.
The pro rata premium for June is calculated as follows:
R500 divided by 30 (days in the month) and multiplied by 11 (remaining days in June).
The pro rata premium would be R183.33.