What is Face Value? - Insurance Navy. In insurance, face value, particularly life insurance policies, refers to the death benefit amount stated in the policy that the insurer agrees to pay the beneficiary upon the insured’s death. This is the nominal value of the policy, not adjusted for inflation or any other factors. The face value is the amount that the policyholder agrees upon when purchasing the policy.
It is the amount that the policyholder’s beneficiaries can expect to receive from the insurance company when the policyholder passes away. The face value is also the basis for calculating the premiums or payments that the policyholder must make to keep the policy in force. It’s important to note that the face value of a policy does not typically include any additional amounts that any riders, dividends, or other policy additions may provide.