The earned premium refers to the amount that an insurance company has received for the portion of an expiring policy. It is what the insured party pays for a portion of the time that the insurance policy was in place, but has expired since. The erned premium is not refundable and could be up and no more than 25% for the total premium of the policy written.
Since the insurance company covers the liability during that period, the subsequent premium fees it receives from the insured party are known as unearned. After the time has expired, it can then report it either as earned or as profit.
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