Face Amount

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Face Amount In insurance, the face amount is the amount of money that will be paid out to the beneficiaries of a life insurance policy when the insured person dies. It is also known as the death benefit, coverage amount, or face value. The face amount is typically equal to the insured person's annual income, but it can be higher or lower depending on the individual's needs and financial situation. Face value is calculated by adding the death benefit with any rider benefits, and subtracting any loans you've taken on the policy. Face value is the primary factor in determining the monthly premiums that will be owed. The face amount of a life insurance policy is determined by a number of factors, including the insured person's age, health, and occupation. The insurance company will also consider the amount of coverage that the insured person needs to protect their loved ones financially. A 20- or 30-year-old might be able to get a policy with a face value that’s roughly 50 times their salary right now, for example, while a 60-year-old might only be able to get a face amount worth ten times their current salary. That’s because insurers assume younger people will live longer, meaning the insurance company can make more money off their premiums to cover that face amount. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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