Explained by an Expert: What Is Face Amount of Life Insurance?

Posted on December 24, 2019 and updated December 24, 2019 in Life Insurance Canada News 2 min read

I’m going to talk a little bit about the face amount of a life insurance policy and how it works. Generally, the face amount of a life insurance policy is the death benefit of the policy, so the higher the face amount, the higher the premium. There are a lot if things that influence a life insurance premium: the person’s gender, the person’s health, the person’s age, the type of plan; but the face amount is a big element because obviously a $100,000 policy is going to be less than a policy that is a million dollars, and there is a lot that goes into choosing that face amount. You are going to want to look at things like income replacement, you’re going to want to look at things like covering your mortgage if something happens to you, things like covering a child’s education, final expenses, etc. There are a lot of different components that go into choosing the right face amount. We have an online needs analysis calculator on our website, or you can speak with a broker who can walk you through all of those different elements to make sure you’re choosing the right amount of benefit for your family.

 

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