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Pro Rata
Premium
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.
Example:
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.
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