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PRO RATA PREMIUM EXPLAINED

    This is a premium based on the length of time the insurer was actually at risk.

    Usually it is used to describe the few days that fall within the month before payment of the premium started.

    Example:
    Cover on a policy or item start on 10 April.
    The monthly premium for the item/policy is R600

    The pro rata premium for June is calculated as follows:

    R500 divided by 30 (days in the month) and multiplied by 21 (remaining days in April).

    The pro rata premium would be R420.00