Level benefit life insurance
Whether you buy term, whole, or universal life insurance, a level death benefit is the standard. With level benefit life insurance, the face amount (death benefit) of the policy never fluctuates from the moment the policy goes into force until it terminates. It doesn’t matter if the insured dies immediately after the policy goes into force or 10 years later (provided the policy is still in force).
Face amount vis-à-vis death benefit
In term life insurance, the face amount is always the same as the value of the death benefit, so you know exactly what your death benefit will be at any time.
In permanent life insurance, the policy may actually pay a death benefit smaller than the face amount in the event that the policyowner takes out policy loans or cash value withdrawals. These two transactions decrease the death benefit dollar-for-dollar.
