A great explanation of the 3 ways of determining returned premium can be found here:



Calculate Returned Premium

Before there were computers, insurance companies used a round slide rule device called an "Insurance Wheel" to calculate how much premium was to be returned for a policy cancelled before its expiration date.


Insurance Wheel replaces the old circular slide rules.


Insurance Wheel supports the 3 normal ways of calculating how much premium is returned when an insurance policy is cancelled before its expiration date:


  • Pro Rata - simple fraction of unearned policy period
  • Short Rate (90% pro rata) - pro rata discounted 10%
  • Short Rate - table driven

Insurance Wheel