Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insur...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Jan 17, 2022

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The Brief

  • The face value of a life insurance policy is the same thing as a death benefit
  • The life insurance face value is the amount of money your beneficiaries will receive after you pass away
  • If you receive the cash value of your life insurance policy, you are likely forfeiting your right to any face value in the long term

When it comes to life insurance, the face value of a policy is extremely important. The face value of a life insurance policy is one component that can provide support and assistance to family members and any other beneficiaries of your policy.

The face value of life insurance policy is the dollar amount that defines the actual worth of your policy. Also referred to as a life insurance death benefit, the face value is the amount of money your beneficiaries will receive after you pass away.

If you are shopping for life insurance, finding a policy with a death benefit for your loved ones is incredibly important. You can find and compare life insurance quotes online from multiple companies with a variety of face value options.

You can use our free quote tool above to compare rates today and see how much you can expect to pay in life insurance rates.

What is face amount in insurance?

The face amount or face value of life insurance is the same as the death benefit of a policy. So, if you’ve ever wondered which is better when it comes to face amount vs. death benefit, the truth is, they’re exactly the same.

The face amount is simply the money the policy owner’s beneficiaries will receive whenever the policy owner passes away.

With regard to the life insurance face amount vs. cash value of a policy, the cash value is the amount you would receive if you surrendered your life insurance policy early. If you receive a cash value from your life insurance policy, you’re likely not going to receive a death benefit.

Most policyholders try to keep a life insurance policy for the duration of their lives rather than using the cash value. But some people need to take advantage of their policy’s cash value if they need financial help with medical debt or some other type of emergency.

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How do you calculate the face value of life insurance?

There are a few ways you can calculate the face value of your life insurance policy. If you can locate your schedule of benefits — which is given to you when you buy life insurance — you will see a summary of the benefits your beneficiaries will receive when you die.

You should start with your death benefit amount. If you have any riders on your policy, add those benefits to your death benefit. The table below shows some common riders associated with different life insurance policies. All of these can impact the face value of your policy over time.

Common Life Insurance Riders that Affect Face Value

RiderDescription
Accidental death benefitPays a benefit in addition to the death benefit of the policy if the insured dies as a result of qualifying accidental injuries
Terminal illnessGives early access to a percentage of the death benefit if diagnosed by a physician as having 12 months or fewer to live
ChildPays a death benefit to the insured parent upon the death of an eligible child
SpousePays a death benefit to the insured person upon the death of an eligible spouse
Waiver of premiumWaives the policy premiums if the insured becomes completely disabled
Disability incomePays a monthly income of 1 – 2% of the face value if the insured becomes disabled
Guaranteed insurabilityGuarantees you the right to buy additional insurance, without proof of good health, at specified dates in the future
Return of premiumThe insurer will return your premiums at the end of the term, minus the additional cost of the rider
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Once you’ve added these numbers, check the cash value of your policy to see if it has accumulated and can be added to your death benefit. This will vary from one policy to the next, so it’s important to familiarize yourself only with the policy you signed up for.

Before you finish, you will need to subtract any loans you have taken out on your policy. The final number you see will be the current face value of your policy.

Do different insurance types have different face values?

The type of insurance you purchased will certainly impact the face value of your policy. A term policy, for example, does not offer the option of accumulating cash value. Because of this, the face value of your term life insurance policy will be the stated death benefit of your policy, plus any riders you have added to your policy.

A whole life insurance policy, however, can be more difficult to understand when it comes to face value and cash value. The face value of a whole life policy has the likelihood of changing over time. Because of this, it’s a good idea to calculate your death benefit at least once a year to know your current face value.

If you’re wondering what type of life insurance you need or trying to figure out exactly what death benefit you want, it may benefit you to do some additional research on policies and death benefits.

Before you buy life insurance, be sure to understand the nature and benefits of your policy, both for yourself and your beneficiaries. If you have a group policy available through your employer, this can sometimes be a great way to save money on life insurance. But you should always compare rates from multiple companies to make sure you’re not overpaying for coverage.

You can use our free quote tool below to get started in your search for life insurance today.