The Difference Between Cash Value and Face Amount

Cash value life insurance accounts are associated with whole or permanent life insurance. A cash value account is a tax-deferred investment that can gain in value over time. Permanent policies have these types of accounts which can be used for many purposes such as tuition or retirement savings. The cash value is also the amount the policy holder would receive if they cashed in or surrendered the policy. Cash value is sometimes called cash-surrender value.

The face amount of the policy is the amount paid to your beneficiaries after your death. Some life insurance policies pay the face amount when the policy matures instead of at death. Most maturity dates occur when the policy has been in force for 100 years.

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Sources

1. Permanent Insurance. Retrieved May 9, 2008, from http://www.lifehappens.org/life-insurance/permanent-insurance