Annualize a mid-term insurance endorsement debit or credit, reverse-calculate a prorated premium, and use months or exact policy dates for the remaining-term factor.

Convert a prorated debit or credit to its annual equivalent (USD). Exact dates use Actual/365.

Positive for an additional premium; negative for a credit.

Annualized Endorsement Premium Formula

The following formula is used to calculate the annualized endorsement premium for a given policy period and endorsement premium.

AP = (EP / PP) × 12

Variables:

  • AP is the annualized premium
  • EP is the endorsement premium
  • PP is the remaining endorsement period in months

To calculate the annualized premium, divide the endorsement premium by the remaining endorsement period in months and then multiply the result by 12 to annualize it.

For exact dates, this calculator uses Actual/365: annualized change = prorated endorsement change × 365 ÷ remaining days. Count the effective date through the day before expiration. The full policy term is used to validate dates, not as an annual denominator. Select the reverse mode to estimate the prorated change. Positive amounts are debits and negative amounts are credits; carrier rules and charges may differ.

What is an Annualized Endorsement Premium?

An annualized endorsement premium is a calculated value that represents the cost of an insurance endorsement on an annual basis. Endorsements are additional coverages or modifications to an existing insurance policy, and their premiums are often calculated for shorter periods. By annualizing the endorsement premium, insurers and policyholders can better understand the cost of the endorsement over a full year, which aids in budgeting and financial planning.

How to Calculate Annualized Endorsement Premium?

The following steps outline how to calculate the Annualized Endorsement Premium.

  1. First, determine the endorsement premium (EP).
  2. Next, determine the remaining endorsement period in months (PP).
  3. Finally, calculate the annualized premium (AP) using the formula AP = (EP / PP) * 12.
  4. After inserting the values and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

Endorsement Premium (EP) = $500

Remaining Endorsement Period (PP) = 6 months

Annualized Premium (AP) = ?

Annualized Endorsement Premium Calculator screenshot