An experience refund is a return of premium or credit issued by an insurer when a group or large-case policy performs better than expected based on claims experience and expenses. Common in group life and disability or in some large individually underwritten arrangements, refunds depend on contractual formulas and may reduce future premiums. They align employer and insurer incentives, rewarding strong risk management and stable claims. Experience refunds are not guaranteed and can vary from year to year.

Benefits teams negotiate experience-rated contracts and monitor utilization to pursue potential refunds. Advisors help interpret year-end settlements and determine whether to credit refunds against future premiums or allocate to plan reserves. Good loss control and communication with the carrier improve the likelihood and predictability of positive experience outcomes.