Face Value: What It Is and Why It Matters

Shawn Plummer

CEO, The Annuity Expert

Have you ever wondered what the term “face value” means? This term is used often in everyday conversation, but not everyone knows its definition. Face value is the worth of a security or currency, as stated on the face of it. For example, if you have a $10 bill, the face value is $10. In other words, this is the amount of money the bill is worth.

What Is Face Value?

The face value of a life insurance policy is the amount of money that the policy will pay out when the insured person dies. The face value is typically set when the policy is purchased and does not change over time. While the face value is generally fixed, some life insurance policies may allow the policyholder to increase the face value at specific points in their life, such as when they have a child or get married. The face value of a life insurance policy can be an essential factor in choosing the right policy for your needs. Therefore, it’s crucial to understand how face value works to select a policy that will provide the financial protection you need.

What Is Face Value

What Does Face Value Mean?

Now that we know the definition of face value let’s consider why it matters. Face value is essential because it determines how much money you will get if you sell the security or currency. For example, if you sell a $100 bill for its face value, you will get $100 back. However, selling the bill for less than its face value will get less money back.

Why Does Face, Value Matter?

As you can see, face value is a fundamental concept. Therefore, it is essential to understand this concept before investing in any security or currency. Otherwise, you may not get the total value of your investment back.

What Does Face Value Mean Regarding Life Insurance?

Now that we know what face value means, let’s look at how it applies to life insurance. The face value of a life insurance policy is the amount of money that the policy will pay out in the event of your death. So, for example, if you have a life insurance policy with a $50,000 face value, your beneficiaries will receive $50,000 if you die.

Face Value

Why Is Face Value Important Regarding Life Insurance?

Face value is essential because it determines how much money your beneficiaries will receive if you die. If you have a life insurance policy with a low face value, your beneficiaries may not receive enough money to cover your final expenses. On the other hand, if you have a life insurance policy with a high face value, your beneficiaries may receive more money than they need.

Next Steps

Choosing the right life insurance policy with a face value will give your beneficiaries enough money to cover your final expenses. At our agency, we can help you find the best life insurance policy for your needs and budget. Contact us today for a free quote. We would be happy to discuss your options and answer any questions about life insurance policies.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed insurance agent and annuity broker with over a decade of first-hand experience. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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