What is an insurance premium refund?
An insurance premium refund is when all or part of an insurance payment is returned to the person who made the payment. This type of reimbursement can be granted for various types of insurance, including auto insurance, health insurance, life insurance or private mortgage insurance. However, an insurance company will generally never send a refund without a written request from the named insured, so keep this in mind if circumstances lead to the possibility of an insurance refund.
The most common type of insurance premium refund occurs when insurance is purchased for a specific period of time, but the person who purchased the insurance decides to cancel before that period ends. This will only be possible if the insurance has not been used; If the insurance company has paid any policy money for any reason, there is no possibility of getting the insurance premium refunded. However, if the policy was purchased for one year and the annual premium was paid in advance, and the individual cancels the policy without using it after a few months, he may be entitled to a prorated refund of the insurance premium, unless specified. otherwise in the insurance documents.
An FHA mortgage insurance premium refund is another common example. This type of federal program allows people to buy a home without paying twenty percent, but they are required to purchase private mortgage insurance (PMI). The buyer must continue to pay the PMI until the home equity is at least twenty percent, at which time the PMI may be cancelled. If people reach 20% of the home equity before the expected period, they can usually apply for a partial refund of the private mortgage insurance premium.
To be eligible for any type of insurance premium refund, you will usually need to contact the company that owns the policy and request a cancellation. Typically, a form will need to be completed and signed, and within a few days or weeks you will receive a check for the prorated amount of your refund. This means that the full premium amount will not be refunded, only the amount that has not been "used" based on how long the policy has been active. This amount may be significantly less than the premium, but it is still worth checking with the company to determine eligibility.