HopefullyInLawSchool
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Simple English definitions for legal terms
face amount
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A quick definition of face amount:
Face amount is the amount of money that is written on a financial document like a life insurance policy. It tells you how much money will be given to the people who are supposed to get it when the person who has the policy dies or when the policy ends. This amount does not include any extra things like interest or insurance for accidents or disabilities.
A more thorough explanation:
Definition: Face amount refers to the amount of money stated on a financial instrument, such as a life insurance policy, that will be paid out to the beneficiaries upon the policyholder's death or when the policy matures. This amount does not include any additional features or benefits.
- John has a life insurance policy with a face amount of $500,000. If he were to pass away, his beneficiaries would receive $500,000.
- Samantha's savings bond has a face amount of $1,000. When the bond matures, she will receive $1,000.
These examples illustrate how the face amount is the literal amount stated on a financial instrument. In the case of John's life insurance policy, his beneficiaries would receive $500,000 upon his death, regardless of any additional benefits or features that may be included in the policy. Similarly, Samantha's savings bond will mature at a face amount of $1,000, without any additional interest or benefits.