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
Disability in which a wage earner is forever prevented from working at full physical capability because of injury or illness. ...
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Model state law of the NAIC that requires that the insurance company and agent provide a prospective insured with written information concerning the cost and benefits of the life insurance ...
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Present value computation of the accrued or projected benefits of a retirement plan. This computation is known as the actuarial valuation because it is based on probability (retirement ...
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