Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
The face value (face amount) of life insurance is the amount of the proceeds to be paid out when the insured of a policy dies.
If you have a term insurance policy, this proceed amount to be paid to the beneficiary is equal to the face amount. If you have a permanent life insurance policy with cash value, the proceeds to be paid out will be the face amount less any loans against the policy.
The face value of a life insurance policy is the amount of money paid to the designated beneficiary after proving the death occurred with a valid death certificate. In most cases these proceeds paid to your beneficiary are tax free. The face amount is paid only if premiums are current and no exclusions apply at time of death.
The face value of life insurance is the original amount of coverage purchased, minus any loans, or adding cash value that accumulates beyond the original face amount. In term insurance, the face value is usually the same as what is paid out at death of the Insured, or the "death benefit". In permanent insurance, the face value may be higher or lower than the original face value.
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If you have a term insurance policy, this proceed amount to be paid to the beneficiary is equal to the face amount. If you have a permanent life insurance policy with cash value, the proceeds to be paid out will be the face amount less any loans against the policy.