Definition - What does Refund mean?
A refund is a financial transaction in which one party returns a certain amount of money to another party. Refunds typically occur when a party fails to deliver on an obligation or a promise. In an insurance context, a policyholder can be given a refund for a payment they made that the insurer was actually supposed to cover.
Insuranceopedia explains Refund
An example of a refund could be a policyholder who receives $150 from their insurer after they were erroneously charged the full amount for a doctor's visit. In this circumstance, the person may have only been responsible for a co-payment of $20. However, mishaps do happen. Refunds can balance out expenses when charges accidentally accrue or when services fail to live up to standards