YOU ASK:
What is the definition of Premium Tax?
WE ANSWER:
The Premium Tax refers to tax levied on premiums paid by policyowners to insurance companies. The premium tax is paid along with the premiums, with the insurance company acting as the collecting and remitting agent, meaning the insurance company gets the premium taxes and submits these to the IRS, the state or municipality.
There are different premium tax rates levied on various insurance policies, particularly to life insurance, homeowners insurance and auto insurance. Travel insurance traditionally has high premium tax rates.
However, there are tax incentives provided for some insurance products, particularly those with a saving component and other kinds of long term insurance.
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More insurance terms around premium tax:
- Premiums in Force
- Premiums Written
- Primary Beneficiary
- Primary Company
- Primary Market
- Prime Rate
- Prior Approval States
- Private Mortgage Insurance
- Private Placement
- Product Liability
- Premium Reduction Option
- Premium
- Premises
- Preferred Risk Class
- Preferred Provider Organization
- Pre-Existing Condition
- Pool
- Pollution Insurance
- Political Risk Insurance
- Policyholders’ Surplus