Short Rate Table

What Does Short Rate Table Mean?

A short rate table is a table that calculates the amount an insurance company can retain from premiums paid by a policyholder who cancels their policy before its expiration. This amount is typically a percentage of the premiums paid to the insurance company.

Insuranceopedia Explains Short Rate Table

The short rate table can vary from policy to policy or from one company to another. Typically, the percentage increases as more time passes from the policy’s purchase date. The longer the time that has elapsed since the policy’s inception, the higher the short rate becomes. This means that the insurance company retains a larger portion of the premium payments the longer the policy is held before being canceled. The time period is generally associated with the percentage that the company can retain from the premium.