Short Rate Table

Definition - What does Short Rate Table mean?

Short rate table refers to the table that calculates how much an insurance company can retain from premiums paid by a policyholder who cancels their policy before its expiration. It is usually a percentage of the payments given to the insurance company.

Insuranceopedia explains Short Rate Table

The short rate table varies from policy to policy, or from one company to another. The percentage grows though as the time elapses from the day of the purchase of policy. The longer the time that it has been cancelled from the inception period, the higher the short table rate. That means that the company retains much more of the premium payments the longer the date from the policy purchase of the date of cancellation. A period of time is usually equated with the percentage that a company can retain a portion of the premium.

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