Life insurance policies pay out what is called the "death benefit".
When you buy a term policy, that is the "face amount" of the policy. The entire face amount of term insurance is paid to the beneficiary.
When you buy permanent insurance, the death benefit may be reduced by the policy owner having taken out a loan on the policy, or using some of the face amount as a living benefit. Conversely, the death benefit for permanent insurance might be higher than the original face amount, due to the policy's growth.
.JPG){kind=avatar}
If there is an outstanding loan on the policy, the loan balance will be deducted from the death benefit.
This assumes you do not have a "graded benefit" policy, which will pay less than the full benefit if death occurs in the first couple of years.
When you buy a term policy, that is the "face amount" of the policy. The entire face amount of term insurance is paid to the beneficiary.
When you buy permanent insurance, the death benefit may be reduced by the policy owner having taken out a loan on the policy, or using some of the face amount as a living benefit. Conversely, the death benefit for permanent insurance might be higher than the original face amount, due to the policy's growth.