A valued policy is one which pays the whole sum assured to the insured or his nominee in the eventuality of the occurrence of the event for which he had taken an insurance policy. In general it must be noted that the objective of insurance is to make good the loss. Going by this, insurance companies often settle claims related to damage of assets, considering the appreciation or depreciation of that asset.
Life Insurance is Valued Policy
In general, life insurance policies are valued policies. The maximum amount of life insurance that one is entitled is decided during underwriting of the policy considering various factors like age, income, etc of the person opting to get his life insured.
If the insured dies due to the cause, which is otherwise not exempted in the policy document, the nominee of the insured is entitled to receive the full sum assured availed by the insured. In such cases, the loss or the economic value of the life of the insured is not calculated while settling the claim.
So, the sum assured paid to the nominee of the insured will be the same irrespective of the number of years the policy has run at the time of occurrence of the eventuality.
