The Premium

The premium is the consideration of the insurance contract; the insurer is entitled to its payment as soon as the thing insured is exposed to the peril it is insured against. The general rule is that the insurer won't issue an insurance contract unless the premium has been paid. This is known as the "cash-and-carry" rule. The exceptions to this rule are the following:

1.) Life/industrial life policy whenever the grace period provision applies

2.) Waiver on the insurer's part (ex. the insurer accepted partial payment but sued for the balance or the insurer agreed to payment by installments)

3.) If against public interest or innocent third parties (ex. compulsory motor vehicle insurance where the third-party claimant happens to be the victim)

The insured is entitled to return of premium in the following cases:

1.) No part of his interest in the insured thing is exposed to any of the perils for which it was insured against
2.) The insurance is made for a definite period and the insured surrenders the policy before the term expires (except in case of life insurance policies)
3.) The contract is voidable because of fraud/misrepresentation by the insurer or his agent or because of facts that the insured is ignorant of through no fault of his own
4.) The insurer didn't incur any liability under the policy
5.) Over-insurance by double insurance