When Is The Face Amount Of A Whole Life Policy Paid?

The face amount of a life insurance policy depends on the coverage the policyholder requires.

According to Statista, almost 54% people owned a life insurance policy in 2020 with an average coverage amount of $460,000. The figure of people depending on life insurance policies is high, do you know why?

In the time of economic instability and unrest, where the basic living standard of an average American is deteriorating day by day, people have started to opt for insurance policies as their backup.

Face Amount Life Insurance

Whole life insurance policies provide lifetime protection to people and their families. It has a guaranteed death benefit which is handed out to beneficiaries after the policyholder dies, and a cash value component which earns interest and grows over time. The death benefit is also known as the face value of a life insurance policy. The cash value, on the other hand, can be borrowed or withdrawn to use during the policyholder’s life for current expenses.

In simple words, the death benefit attached to the policy is also known as the face amount in insurance, because it determines the total coverage that a person may get, and how much premiums are owed each month.

Face Amount vs Death Benefit

It is true that the face amount is the death benefit but the death benefit may not always be equal to the face amount.

Let me explain.

In a lot of insurance policies, there is an added benefit of riders that the policyholder may add to their existing policy. For example, a rider added to the policy that the death benefit will double in case of a certain type of accidental death. That way the death benefit will be different than that of the face amount.

Moreover, an increase in the cash value component will eventually increase the face value of the policy. But, if there are pending loans, the face value could be decreased hence lowering the death benefit of the policy.

How do I determine the Face Value of a Life Insurance Policy?

There is no straight answer to this; determining the face value of a policy solely depends on the needs and requirements of the policyholder.

All you should be doing is making a list of your goals, what is the long-term objective that you aim to gain from your life insurance policy?

How much money will your spouse and your family need to maintain a good quality life? How would they bear their future financial expenses; do you have a kid going to college in the next couple of years, or a house mortgage that needs to be paid?

Do you have current debts that you still need a couple of years to pay back? If you die during this time, how much debt will be transferred on your family? Do you have any other pending loans?

How much coverage do you need? And this will again be decided looking at your current family structure. If your kids are all married and not your dependents anymore, you only need financial protection for your spouse. So you should look for a term life coverage of 10 years. But if you’ve just married and your kids are toddlers now, a whole life policy is your best bet because you could use the cash value component to pay off their expenses when they’re off to college.

It is important that you make sure you know the answers to all of these questions and that is how you will be able to determine the face value of your life insurance policy. If you don’t need more coverage, you will look for a lower amount of face value and so forth.

When is the Face Amount of a Whole Life Policy paid?

Since it is clear that the face amount of the whole life policy is the death benefit or the original coverage, the face amount is only paid after the policyholder dies.

Upon the death of the insured, the beneficiaries may come forward to claim the benefit. There is often a time frame of 30-90 days during which the claim must be made. The insurance company may ask for documents of the policyholder such as the contract and their death certificate. After that, when everything goes smoothly, the insurance company will give the full death benefit to the beneficiaries.


The face amount of a whole life insurance policy is the death benefit, but it isn’t necessary for it to remain the same since the time the policy was signed. The face amount can change with an increase or decrease in the coverage or the nature of the policy.

The death benefit is only given to the beneficiaries after the insured has died, but the cash value can be withdrawn or borrowed, tax-free, even during the life of the policyholder. Of course, it takes almost 20 years for the cash value to gain enough funds to pay for major expenses during their life.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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