flat, pro rata, or short rateIn a flat cancellation the full premium is returned to the insured. A pro rata cancellation means the insurer has charged for the time the coverage was in force. Short rate cancellation entails a penalty in excess of pro rata for early termination. A cancellation is when the insurer cancels a policy mid-term for cause giving the insured ample notice to find coverage elsewhere as prescribed by the state insurance department.
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Flat, Pro-rata, or Short Rate : In a flat cancellation the full premium is returned to the insured i.e., the cancellation of a Policy as of its effective date without a premium charge. A pro-rata cancellation means the insurer has charged for the time the coverage was in force. Short rate cancellation is termination of an Insurance contract at the request of the insured prior to the expiration date where the contract provides for a premium larger than the charges applicable for the period. Thus, if the insured cancels the Policy before the expiration date, and increased charges is made because of the fixed expenses incurred by the Company.
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MEDICAL,USA: Termination of an insurance contract by either the insured or the insurance company before the contract matures or the end of its term period. This may occur for nonpayment of premiums.
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US: The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.
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The termination of an Insurance contract by an Insurer or an insured prior to the end of the Policy term. Insurance contracts give Insurers and insured varying cancellation rights.
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US: The termination of an insurance policy or bond, before its expiration, by either the insured or the insurer. Insurance policy cancellation provisions require insurers to notify insureds in advance (usually 30 days) of canceling a policy and stipulate the manner in which any unearned premium will be returned. As respects reinsurance, cancellation is used in the following contexts
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The termination of insurance coverage during the policy period. Flat cancellation is the cancellation of a policy as of its effective date, without any premium charge.