- It refers to the insurance fee that is charged for covering an amount of time less than one year, but this fee will be higher than the proportionate part of an annual premium
- It represents an insurance policy which is offered for a period less than the standard yearly duration
- The client decided to cancel the policy after six months, so the insurance company used a short rate to calculate the return premium.
- Since I only need the insurance for six months, I opted for a short rate instead of the full annual policy.
- Due to the brief nature of my venture, I was advised to consider using a short rate to get adequate coverage without committing for a whole year.