What does face amount mean cash surrender mean in a life insurance policy?

Question

What does face amount mean cash surrender mean in a life insurance policy?

Answer 1

The face value of a life insurance policy is the amount the insurer will pay to the beneficiary(s) upon the death of the policyholder. The face value is also known as the death benefit. The cash value or surrender amount of a life insurance policy is the amount of “equity” a whole life policy has accumulated. It is the amount the policyholder would be paid if he or she were to cancel the policy. Early in the life of a whole life or universal life insurance policy, the cost of insuring against your premature death is much less than the premium amount. The insurance company deposits the excess amount—less the company’s profits and fees—into a type of savings account. This amount is known as “cash value.” These funds are invested by the insurance company. Some of the proceeds from the investments are credited to the account, increasing the cash value. These funds are available to you in the form of a loan or as a withdrawal. If you cancel the policy, you receives the cash value as the policy “surrender amount.”

Answer 2

Face amount if the death benefit

Cash surrender is the amount you will get if you cancel the policy. This is less than the cash value until the policy is about 7-9 years old.

Cash value is the value of the cash as long as the policy is in force.

If someone is trying to sell you a cash value policy don't let them "sell" you on the cash value benefits. You should buy this for the insurance benefit. The cash value is not an investment. If you compare life insurance to an investment the investment will win.

Most people could use a mix of term and cash value life insurance.

Answer 3

these are two different items, face amount means what the beneficiary will get when the insured dies, cash surrender value means what the policy owner gets if he cancels out the insurance policy, and the beneficiary gets both the face value and any cash value of the policy if the insured dies and there is any cash value, most insurance policies offer a loan, and if there is cash value the loan amount will be deducted from cash value, but in this case the beneficiary gets the face value and what ever is left over from the cash value when the loan amount is deducted.