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Mathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions Business Math17th EditionMary Hansen 3,734 solutions What happens when the cash value of a life insurance policy equals the face value?What Happens when the Cash Value Equals the Face Amount? Cash value equals the face amount of the life insurance policy at the policy's maturity date–the technical insurance term for this is the endowment age of the insured. When this happens most policy's “endow” and the policy owner receives the cash benefit.
What happens if you take the cash value of a life insurance policy?In addition to providing a death benefit, cash value life insurance builds up cash value you can draw from now. But unless you withdraw, borrow or otherwise use the cash value, it typically goes to the insurance company—not your beneficiaries—after your death.
Is the face amount the same as cash value in life insurance?Face Value vs.
Although they sound similar, the cash value and face value within a life insurance plan are very different. The cash value functions like a savings account that the policyholder may be able to borrow from in a loan. This account is tax-deferred so it tends to grow at a steady rate.
What happens when cash value equals death benefit?Increasing death benefit: This is also known as option B or option 2. In this case, the death benefit increases as the cash value does. This death benefit equals the cash value plus the death benefit your policy was issued with. Your beneficiary does receive the cash value in this case.
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