Not really - the concept of having a "value" and agreeing to that amount in advance does not apply to life insurance. The purpose of a valued policy is to determine in advance the payout of an object that is difficult to assign a dollar amount to. You can't assign a dollar amount to the value of a life
I thought the way life insurance worked is that the insurer agrees to pay a preset amount if a certain event (death) occurs. From my understanding the payout is determined in advance. Is there something I’m missing here?
It also seems that the examiners report for spring 2015 7a accepted an answer saying life insurance was a valued policy.
Valued policies are insurance contracts that cover things such as a rare painting where we set out an agreed value at x amount.
I do not agree with the examiners report based on the study kit. Page 89 specifically states that " A valued policy is not to be confused with a policy which provides that upon the happening of some contingent event, a sum fixed or calculable becomes payable to the insured, regardless of whether the insured suffers any pecuniary loss". The next few lines even provides life insurance specifically as an example of a contract that is not a valued policy
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Not really - the concept of having a "value" and agreeing to that amount in advance does not apply to life insurance. The purpose of a valued policy is to determine in advance the payout of an object that is difficult to assign a dollar amount to. You can't assign a dollar amount to the value of a life
I am a bit confused by the above response.
I thought the way life insurance worked is that the insurer agrees to pay a preset amount if a certain event (death) occurs. From my understanding the payout is determined in advance. Is there something I’m missing here?
It also seems that the examiners report for spring 2015 7a accepted an answer saying life insurance was a valued policy.
Valued policies are insurance contracts that cover things such as a rare painting where we set out an agreed value at x amount.
I do not agree with the examiners report based on the study kit. Page 89 specifically states that " A valued policy is not to be confused with a policy which provides that upon the happening of some contingent event, a sum fixed or calculable becomes payable to the insured, regardless of whether the insured suffers any pecuniary loss". The next few lines even provides life insurance specifically as an example of a contract that is not a valued policy