An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

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Mimi

Business

11 February, 07:52

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

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Cordell Acevedo · Answer 1

The face amount of the new term policy would be $50,000

Explanation:

In life insurance, face amount is referred to as the amount paid on the policy's maturity date, on the death of the insured, or if the policy terms permit on his or her total disability.

The face amount of the term policy would remain the same as when it was purchased as provided under the whole life policy. which is $50,000.