#### FAQ: What Does Face Value Mean In Life Insurance?

The face value of life insurance is the dollar amount equated to the worth of your policy. It can also be referred to as the death benefit or the face amount of life insurance. In all cases, life insurance face value is the amount of money given to the beneficiary when the policy expires.

## What is the difference between face amount and death benefit?

The face amount is the purchased amount at the beginning of life insurance. The face amount is stated in the contract or application. On the contrary, the death benefit is the amount of money that is paid to a beneficiary by an insurance company.

## What does face amount mean in insurance?

What is the Face Amount on an Insurance Policy? The amount paid out on a life insurance policy (such as \$100,000 upon the death of the person named on the policy) is also termed the face amount, because it is stated on the first page (or “face”) of the policy documentation.

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## What does minimum face amount mean on a life insurance policy?

The minimum death benefit that an investor may purchase through a variable-life contract. If the company states a minimum face amount, then the investor knows the minimum initial premium will be the amount of money necessary to attain that minimum face amount.

## Do you lose cash value life insurance?

When the policyholder dies, their beneficiaries receive the death benefit, in lieu of any remaining cash value. Permanent life insurance offers both a death benefit and a cash-value amount but on death, beneficiaries only receive the death benefit. Any remaining cash value goes back to the insurance company.

## What is face value?

Face value is the actual value of a digit in a number. To get the place value of a number, we multiply the digit value with its numerical value. For example, in the number 452, the place value of 5 is (5 × 10) = 50, since 5 is in tens place. The face value of a digit is the number itself.

## What does face amount mean?

Legal Definition of face amount: the amount of money payable under an insurance policy at the time of a loss.

## How is face value calculated?

This simply means the value of shares in the company’s books. It is calculated by dividing the company’s net worth or the difference between its assets and liabilities with the number of issued shares.

## What is the difference between face value and cash value of life insurance?

The face value is the death benefit. This is the dollar amount that the policy owner’s beneficiaries will receive upon the death of the insured. The cash value is the amount you would receive if you surrendered the policy early, forfeiting the death benefit in return for cash up front.

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## What is the difference between face value and present value?

Present Value is the value of an expected (as in, you didn’t receive it yet) income stream determined as of the date of valuation. Face Value commonly refers to the value that is paid to you at the maturity date.

## What is initial face amount?

The face amount is the initial amount of money stated on the life insurance application when you first buy the policy and is intended to be paid as a death benefit to your heirs. The death benefit is the actual amount the carrier pays your beneficiaries, and you can tack on additional benefits with riders.

## What is the minimum death benefit?

Minimum Death Benefit is the minimum guaranteed death benefit that will be paid to the beneficiaries if the holder of a variable life insurance policy dies.

## What happens to cash value in whole life policy at death?

Insurer will absorb the cash value of your whole life insurance policy after you die, and your beneficiary will get the death benefit. You can borrow or withdraw money from your life insurance policy. You can also use the money to pay for your premiums.

## What happens to the cash value after the policy is fully paid up?

What happens to the cash value after the policy is fully paid up? The company plans to use the cash value to pay premiums until you die. The company could require you to resume paying premiums, or reduce the amount of the death benefit to an amount that the remaining cash value will support.

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## How do I know if my life insurance has cash value?

Simply let your insurer know and they will pay you the life insurance policy’s net cash value. The net cash value is the “actual” surrender value of the policy. You will typically find it listed separately in your life insurance statements.

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