Definition - What does Ad Valorem mean?
An ad valorem is a tax levied on the assessed value of an item. Its name is, appropriately, Latin for "according to value." Ad valorem taxes are usually applied to real estate and to personal property, including (in the latter case) duties on goods imported from abroad.
Ad valorem taxes imposed by municipalities are commonly referred to as property taxes and are often an important source of revenue and operating funds for state and municipal governments.
Insuranceopedia explains Ad Valorem
The taxed amount under an ad valorem scheme is based on the value of the transaction or the property being taxed. For goods, the tax is usually imposed at the time of transaction, as is the case for sales taxes and value-added taxes.
Ad valorem taxes for real estate and personal property, on the other hand, are determined and levied annually. Property taxes are usually levied by local government entities, including counties, school districts, and special purpose districts. Property owners can be taxed by more than one entity.
How Well Do You Know Your Life Insurance?
The more you know about life insurance, the better prepared you are to find the best coverage for you.
Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.