Legal Definitions - face amount

Definition: Face amount refers to the amount of money stated on a financial instrument, such as a life insurance policy, that will be paid out to the beneficiaries upon the policyholder's death or when the policy matures. This amount does not include any additional features or benefits.

• John has a life insurance policy with a face amount of $500,000. If he were to pass away, his beneficiaries would receive $500,000.
• Samantha's savings bond has a face amount of $1,000. When the bond matures, she will receive $1,000.

These examples illustrate how the face amount is the literal amount stated on a financial instrument. In the case of John's life insurance policy, his beneficiaries would receive $500,000 upon his death, regardless of any additional benefits or features that may be included in the policy. Similarly, Samantha's savings bond will mature at a face amount of $1,000, without any additional interest or benefits.