How to Determine the Values of Life Insurance Policies

 

The CEO of Bancorp Services, Seth Koppes leverages his financial background and expertise in health, technology, and insurance to provide bespoke financial products to his clients. The company develops financial structures and implements systems to meet unique needs. The financial solutions have earned Seth Koppes and his team three patents, including a product that tracks the values of life insurance policies.

A life insurance policy has a face cash value, the death benefit, which is the dollar amount the beneficiaries receive after the policyholder’s demise. The value directly depends on the insurance policy cost; the higher the premiums, the more the death benefit.

When you subscribe to the policy, the initial face value is indicated on the documents, alongside any scheduled future changes. The face value also changes when you change the premiums during the duration or take out a cash value.

To calculate the death benefit upon demise, review the benefits schedule in the policy, including riders, which are additional benefits you might qualify for. An example of a rider is a stipulation that, should the policyholder die from a specific accident, the face value doubles. Do note that permanent policies have both the face value and the cash value, while term policies contain the face value only. The cash value is more of a savings account policy, where you can borrow money against your life insurance policy.