Enter your annual premium, effective months, or other required details into the calculator to determine your prorated insurance premium.
Prorated Insurance Calculation Formula
The following formula is used to calculate the prorated insurance premium:
Prorated Premium = (Annual Premium / 12) * Effective Months
Variables:
- Prorated Premium is the premium amount for the prorated period ($)
- Annual Premium is the total premium for the year ($)
- Effective Months is the number of months the insurance is in effect
To calculate the prorated premium, divide the annual premium by 12 to get the monthly premium, then multiply by the effective months.
What is Prorated Insurance Calculation?
Prorated insurance calculation refers to determining the insurance premium for a period less than a full policy term, usually less than a year. This can occur when a policy is initiated or terminated mid-term, and the insured needs to pay only for the period they were covered. Understanding how to prorate insurance premiums is essential for accurate financial planning and ensuring that you are paying the correct amount for your coverage.
How to Calculate Prorated Insurance Premium?
The following steps outline how to calculate the prorated insurance premium using the given formula:
- Determine your annual premium.
- Identify the number of months the insurance will be in effect (effective months).
- Use the formula: Prorated Premium = (Annual Premium / 12) * Effective Months.
- Calculate the prorated premium by plugging in the values.
- Check your answer with the calculator above to verify your calculation.