What does Face Value mean?

Answer:
If you have an auto insurance policy, property policy,

or a health insurance policy, take a look at the policy’s declaration’s page. Here you’ll find the maximum amount payable. This amount is the policy’s face value.

A life insurance policy’s face value is the total amount of the death benefit. If you have a “double indemnity” life insurance policy, the beneficiary will receive double the policy’s face value under certain named circumstances such as accidental death.

The face value of bonds represents the value the bond will be at maturity. Before reaching maturity the bond’s value might be more or less than the face value depending on market conditions. This value is also called the par value or par. The face value of a stock is the original cost of the stock shown on the stock certificate.

The face value of a mortgage is the amount of the loan without taking interest or other fees into consideration. For example, if you have a $100,000 mortgage but will be paying tens of thousands of dollars in interest over the course of the loan, the face value remains $100,000 regardless of how much interest you will be paying.


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