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The face amount of life insurance is a very important component within a policy because it can help provide support to family members. We recommend doing your research and looking at your family’s spending habits and expenses to settle on the face value that is right for you. This number may be influenced by your income, family size, location, and financial goals. Read on to learn how the face amount of life insurance works, how to calculate it, and what yours should be.
Most life insurance policies intend to help provide financial protection for loved ones after you pass. The face value of life insurance is the dollar amount equated to the worth of your policy. It can also be referred to as the death benefit or the face amount of life insurance. In all cases, life insurance face value is the amount of money paid to the beneficiary when the policy expires.
The first step in figuring out the face value of your plan is visiting your benefits schedule. Here you should see the death benefit and any additional riders you added to your plan.1 However, if you don’t yet have an active policy, Aflac offers whole and term life insurance designed to help meet your unique preferences.
The face value of the life insurance plan you decide on typically determines what your premium payments will look like too. In some cases, you may be able to change the face amount throughout the life of the policy. This depends on the insurance company and policy you choose.
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Although they sound similar, the cash value and face value within a life insurance plan are very different. The cash value functions like a savings account that the policyholder may be able to borrow from in a loan. This account is tax-deferred so it tends to grow at a steady rate.2
Cash value isn’t accessible in all Aflac life insurance plans, but there are still other benefits to be considered to help support a child and spouse.
On the other hand, the face value represents the monetary value of the death benefit plus the value of any additional riders you may choose to add to your policy.1 If you don’t add on any additional benefits, then the face value may equate to the death benefit amount alone.
The face value of life insurance is influenced by the usual suspects. Medical history, age, number of dependents, income, and financial goals all contribute to the face amount of a policy. Any outstanding debt may have a role to play in the final number you select as well. Chatting with an Aflac agent one-on-one can help you determine what face value amount would be best for you.
There are a handful of ways to calculate the face amount of a life insurance policy. At Aflac, you can use our life insurance calculator to help determine the face value of an Aflac® Life Solutions – Term Life or Whole Life plan that may be best for you.
Depending on the route you choose, there may be different ways to calculate the face amount of your plan. We recommend speaking with an agent to be sure.
Depending on your unique situation, you can choose between term and whole life insurance at Aflac. In both types of plans, you can chat with an agent about the life insurance face amount that makes the most sense for you and your family.
1 Investopedia. What Is the Face Value of a Life Insurance Policy? Updated September 6, 2023. Accessed February 20, 2024. https://www.investopedia.com/ask/answers/013015/how-do-i-determine-face-value-life-insurance-policy.asp.
2 Investopedia. Life Insurance: What It Is, How It Works, and How To Buy a Policy. Updated September 21, 2023. Accessed February 20, 2024. https://www.investopedia.com/terms/l/lifeinsurance.asp.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Life (A68000 Series) - In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400. Term and Whole Life (B60000 Series) - In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Group Whole Life (Q60000 Series) - In Arkansas, Delaware & Oregon, Policy Q60100M. In Idaho Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Texas, Policy Q60100MTX. Group Term Life (Q60000 Series) - In Delaware, Policies Q60200M. In Arkansas, Idaho, Oklahoma, Oregon & Texas, Policies ICC18Q60200M, ICC18Q60300C, ICC18Q60400C.
This is a brief product overview only. Coverage may not be available in all states. Benefits/premium rates may vary based on plan selected. Optional riders may be available at an additional cost. Plans and riders may also contain a waiting period. Refer to the exact plans and riders for benefit details, definitions, limitations and exclusions. For availability and costs, please contact your local Aflac agent/producer.
Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
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