Legal Definitions - face amount insured by the policy

Definition: The face amount insured by the policy refers to the amount of money that an insurance policy will pay out in the event of a claim. It is also known as the face value or the face of the policy.

Example: If you have a life insurance policy with a face amount of $500,000, that means that if you were to pass away, your beneficiaries would receive a payout of $500,000 from the insurance company.

Explanation: The example illustrates how the face amount insured by the policy works in the context of life insurance. The face amount is the amount of money that the policy will pay out to the beneficiaries upon the death of the insured person. In this case, the face amount is $500,000.