Which of the following statements about deposit premium is false?

The correct statement regarding deposit premium being false is that it is 50% of the actual premium. In this context, a deposit premium typically represents an estimated amount calculated at the time a policy is issued, which can be based on previous experience, standard rates, or other underwriting considerations.

The other statements reflect accurate aspects of deposit premiums. For example, deposit premiums must be paid in advance to initiate coverage, as a form of financial commitment from the policyholder. Additionally, deposit premiums can be subject to adjustments after an audit, which may occur at the end of a policy period to reconcile any discrepancies between estimated and actual exposure or risk.

Thus, identifying that a deposit premium is specifically defined as 50% of the actual premium is incorrect, as the actual percentage can vary and is not a fixed standard within insurance practices. This understanding underscores the nature of deposit premiums as a flexible, estimated payment that serves as a starting point for actual premium calculations.