What is a unit of insurance?

A unit of insurance is a base unit of value determined by an insurance company, according to The Nest. The amount of coverage that a unit is worth varies from company to company, but $1,000 is a common value.

For life insurance, a unit of insurance is the base value of whole or term life insurance. In contrast, a unit of insurance for property insurance refers to an object that is covered by the insurance plan, states The Nest. The value of a unit of insurance is typically determined through the actuarial history of that kind of insurance, so the value of a unit of insurance can vary based on region and company.