Face Of Policy

What Does Face Of Policy Mean?

The face of a policy refers to the amount of coverage specified in an insurance policy, which the insured agrees to pay for. This figure, often displayed on the policy’s front page, is commonly known as the policy’s face value. In life insurance, the face value represents the death benefit—the amount the policyholder would receive upon the insured’s death.

Insuranceopedia Explains Face Of Policy

It is important to distinguish between the face value and the cash value of a life insurance policy. The face value refers to the death benefit—the amount paid to beneficiaries upon the insured’s death—and remains fixed. In contrast, the cash value represents the savings and investments that accumulate over time in permanent policies, which can fluctuate based on market performance and investment success. Even if the cash value declines due to poor investment performance, the face value (death benefit) remains unchanged, ensuring beneficiaries receive the agreed-upon amount.