https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AFace_valueDefinition:Face value - Revision history2026-04-29T11:03:33ZRevision history for this page on the wikiMediaWiki 1.43.8https://www.insurerbrain.com/w/index.php?title=Definition:Face_value&diff=13004&oldid=prevPlumBot: Bot: Creating new article from JSON2026-03-13T12:25:50Z<p>Bot: Creating new article from JSON</p>
<p><b>New page</b></p><div>💰 '''Face value''' refers to the nominal amount stated on an [[Definition:Insurance policy | insurance policy]] — the sum that the [[Definition:Insurance carrier | insurer]] agrees to pay upon the occurrence of a covered event, most commonly death in the context of [[Definition:Life insurance | life insurance]]. Sometimes called the [[Definition:Death benefit | death benefit]] amount or sum assured, the face value represents the starting point for determining the payout to [[Definition:Beneficiary | beneficiaries]], though the actual amount disbursed may differ depending on policy features such as outstanding [[Definition:Policy loan | policy loans]], accumulated [[Definition:Dividend | dividends]], or [[Definition:Rider | riders]] that adjust the benefit.<br />
<br />
📊 In practice, the face value anchors the entire economics of a life insurance contract. [[Definition:Insurance premium | Premiums]] are calculated based on the face value in conjunction with the insured's age, health profile, policy type, and other [[Definition:Underwriting | underwriting]] factors. For [[Definition:Term life insurance | term life]] policies, the face value typically remains level throughout the coverage period, while [[Definition:Whole life insurance | whole life]] and [[Definition:Universal life insurance | universal life]] products may allow the face value to increase through paid-up additions or decreasing loan balances. Some jurisdictions, particularly those operating under [[Definition:IFRS 17 | IFRS 17]] or local regulatory reporting standards, require insurers to distinguish between the guaranteed face value and any conditional or variable benefit components when reporting [[Definition:Insurance reserves | reserves]] and [[Definition:Liability | liabilities]].<br />
<br />
🔑 Understanding face value is essential for [[Definition:Policyholder | policyholders]], advisors, and insurers alike because it directly determines the level of financial protection a policy provides. Insufficient face value relative to a family's income replacement needs or debt obligations undermines the fundamental purpose of the coverage. On the insurer's side, the aggregate face value across its [[Definition:Book of business | book of business]] drives [[Definition:Capital adequacy | capital]] requirements, [[Definition:Reinsurance | reinsurance]] purchasing decisions, and [[Definition:Actuarial valuation | actuarial reserve]] calculations. In the [[Definition:Life settlement | life settlement]] market, face value is the benchmark against which secondary market prices are quoted, making it a critical metric well beyond the original policy transaction.<br />
<br />
'''Related concepts:'''<br />
{{Div col|colwidth=20em}}<br />
* [[Definition:Death benefit]]<br />
* [[Definition:Sum insured]]<br />
* [[Definition:Life insurance]]<br />
* [[Definition:Insurance premium]]<br />
* [[Definition:Cash value]]<br />
* [[Definition:Life settlement]]<br />
{{Div col end}}</div>PlumBot