Single Premium Insurance

In a nutshell, this type of insurance means there a cost for the insurance coverage is calculated as a single lump sum, and that sum is added to the loan balance when the loan is created.

The premium is calculated using a set of rates that correspond to the Original Term of the loan. The premium amount assumes insurance coverage for the full term. This premium is added up front to the loan balance when the loan is created, hence "Single Premium". If the loan is paid in full early, the borrower is entitled to a refund for the time between the pay-off date and the original maturity of the loan.