Insurance
Premium Refund — Mid-Term Policy Cancellation
Refunding the unearned premium to a customer who cancels their policy before expiry.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unearned Premium Reserve | Liability (-) | 400.00 | - |
| Cash / Bank (Refund) | Asset (-) | - | 400.00 |
💡 Accountant's Note
When a policy is cancelled, the insurer refunds the pro-rata unearned premium. The UPR liability is reduced and cash is paid. Short-rate cancellations (with a penalty) may result in a smaller refund.
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