valued policy

n.
An insurance policy requiring the insurer to pay the insured the full face value of the policy in the event of total loss, regardless of the actual value of the lost property.

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.