Proration

Published: | Updated: April 15, 2018

Definition - What does Proration mean?

Proration is the act of distributing or charging money proportionate to some other element.

Insuranceopedia explains Proration

Proration is often associated with a mode of payment calculated because something else is in play that stops someone from making a full payment. One typical example is that of a person who rents an apartment on the 15th day of the month. By the 30th, they are only expected to pay half of a month's rent because of the length of their tenancy.

Another case of proration is the corporate decision to pay shareholders with a combination of shares and cash because the corporation cannot afford to pay them in full using either one of those options alone.


How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

Share this: