Face Amount of Life Insurance

The face amount of life insurance is a very important component within a policy because it can help provide support to family members. We recommend doing your research and looking at your family’s spending habits and expenses to settle on the face value that is right for you. This number may be influenced by your income, family size, location, and financial goals. Read on to learn how the face amount of life insurance works, how to calculate it, and what yours should be.

What is the Face Amount of Life Insurance?

Most life insurance policies intend to provide financial protection for loved ones after you pass.² 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.³

How the Face Value of Life Insurance Works

The first step in figuring out the face value of your plan is visiting your benefits schedule. Here you should see the death benefit and any additional riders you added to your plan.¹ However, if you don’t yet have an active policy, Aflac offers whole and term life insurance designed to help meet your unique preferences.

The face value of the life insurance plan you decide on typically determines what your premium payments will look like too. In some cases, you may be able to change the face amount throughout the life of the policy. This depends on the insurance company and policy you choose.

Face Value vs. Cash Value

Although they sound similar, the cash value and face value within a life insurance plan are very different. The cash value functions like a savings account that the policyholder may be able to borrow from in a loan. This account is tax-deferred so it tends to grow at a steady rate.²

Cash value isn’t accessible in all Aflac life insurance plans, but there are still other benefits to be considered to help support a child and spouse.

On the other hand, the face value represents the monetary value of the death benefit plus the value of any additional riders you may choose to add to your policy.³ If you don’t add on any additional benefits, then the face value may equate to the death benefit amount alone.