So, I’ve been looking into my life insurance policy, and I’m confused about the whole face value thing. Does it change over time, or is it always the same? Like, I’ve heard something about cash value too, but IDK how it works. Anyone here know the details?
Yeah, the face value is the amount your beneficiaries get when you die. It can change if you mess with the cash value, like taking money out. That lowers the face value.
Dev said:
Yeah, the face value is the amount your beneficiaries get when you die. It can change if you mess with the cash value, like taking money out. That lowers the face value.
Wait, what’s cash value? I thought it was just a set amount, like a payout.
@Larkin
Cash value is like money you can pull out while you’re still alive. But if you take too much, your face value goes down, so your heirs get less.
@Larkin
Yeah, it’s kinda like a savings account built into the policy. But if you borrow from it and don’t pay it back, your payout when you die gets smaller.
Pro tip: If you have a term life policy, the face value usually stays the same until the policy ends. But permanent policies can change, especially with dividends or extra riders.
Kellan said:
Pro tip: If you have a term life policy, the face value usually stays the same until the policy ends. But permanent policies can change, especially with dividends or extra riders.
Oh, interesting! So it’s only with permanent insurance where the face value might go up or down?
@Jonah
Yup, exactly! Term insurance is straightforward—no cash value to worry about. Permanent life insurance is a bit more complicated.
I had no idea about the face value and cash value stuff either. My agent explained that if I don’t touch the cash value, the face value can even go up if I have some extra benefits, like riders. Anyone else experience that?
@Shawn
Yeah, I got a cost of living rider, so my face value goes up with inflation. Didn’t even know that was a thing until I looked into it more.
BTW, if you ever want to know your current face value, just check your policy’s statement. It’s all in there, including any changes that might’ve happened.
Good to know about the face value changes. I always wondered how much I’d leave for my family if I took out some cash… guess I better not mess with it too much lol.