Questioned on the Intereconomia television channel on whether Real's injured star is insured for €91 million ($123 million, 78 million pounds) in the event that he is forced to end his career, club president Florentino Pérez replied: "Yes, sure".
"It's a life insurance, against accidents. Bale is insured for the amount he cost," he added, making it clear that the insurance policy covers death and permanent invalidity.
Neither Real Madrid nor Tottenham, Bale's former English Premier League club, had previously disclosed the price tag, which the British press had speculated at up to €101 million..
The figure means that Real Madrid's Portuguese striker Cristiano Ronaldo remains the world's most expensive player, costing €94 million (80 million pounds) when he moved from Manchester United in 2009.
Pérez also denied a report in the Marca sports daily that Bale, who has only started one match since his August transfer due to a series of niggling injuries, had suffered a herniated disc.
"They said it was a hernia, but it isn't. If he had one we would say so like usual," he said.
"(Bale) hopes to be able to play on Saturday. His problem, as the whole world knows, is the lack of pre-season training, he suffered a thigh injury.
"But now he's perfectly fine. I think he's training normally, hoping to play Saturday," added Pérez.