Valued Policy
Policy that pays a specified sum not related in any way to the extent of the loss. The term applies to a life insurance policy rather than to a contract of indemnity because the former does not purport to restore an insured (or beneficiary) to the same financial position after a loss as prior to the loss. The sum of money that a life insurance policy pays as a death benefit is a definite amount that may or may not have any relation to the quantitative value of the death. Thus, the life insurance policy is deemed to be a valued policy.
Popular Insurance Terms
Number of times losses occur, and their severity. These statistics measure expectation of loss, and are critical in establishing a basic premium or the pure cost of protection that is based ...
Type of major medical deductible amount that acts as a corridor between benefits under a basic health insurance plan and benefits under a major medical insurance plan. After benefits are ...
Rate applied when two or more separate buildings are insured under one policy, and/or when two or more separate contents are insured under one policy. ...
Approach in pension plan funding under which a separate account is maintained for comparing actual contributions to the plan with the minimum contributions required to meet future employee ...
Addition to the pure cost of insurance that reflects agent commissions, premium taxes, administrative costs associated with putting business on an insurance company's books, and ...
Changing state of the economy associated with changes in human wants and desires such that losses or gains occur. Dynamic changes are not insurable. ...
Endorsement to an automobile policy that pays specified amount for towing and related labor costs. ...
Legislation in a number of states requiring insurers to pay the face amount of a fire insurance policy in case of total loss to a dwelling (or sometimes another specified type of building), ...
Alleged torts or breaches of contract, but not crimes. Action is brought by one individual against another at the litigant's own expense, within the statute of limitations. The losing party ...
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