What Does Face Amount Mean In Life Insurance? 
The face amount of the policy represents the face amount the policy is scheduled to pay out . In the case of a graded death benefit the policy will pay a reduced amount for the first 2 or three policy years before going to the actual face amount . Some companies pay dividends . These dividends can be used to buy additional insurance thus increasing the death benefit . But dividends are not guaranteed Should you die the beneficiary would receive the Face amount of the policy plus any paid up insurance accumulated by the dividends . In the case of a Universal Life policy , the policy would pay the face amount plus if you choose you can have the death benefit increased by any cash value accumulated in the policy . Because of the nature of Universal Life you need to make sure you are paying sufficient premium to keep the policy in force , otherwise the policy would lose the death benefit entirely . Always read your annual statement if you have a Universal Life policy . 