Final answer:
A Face Amount Plus Cash Value Policy pays both the face amount and the accumulated cash value to the beneficiaries upon the insured's death, offering both a guaranteed death benefit and flexible use of the cash value during the policyholder's lifetime.
Step-by-step explanation:
A Face Amount Plus Cash Value Policy is designed to pay out the face amount of the policy, which is the death benefit, in addition to the policy's accumulated cash value upon the insured's death. This type of life insurance policy is particularly valuable because it combines the guaranteed payout of the face amount with the added benefit of the cash value that grows over time. The cash value serves as an account that the policyholder can use during their lifetime, with the understanding that it will be added to the death benefit when the policy pays out.
It Pays Out When the policyholder dies, and this financial protection can be used to cover things like medical expenses or other final costs, providing peace of mind and financial security to the survivors of the insured. Additionally, the accumulation of cash value in a life insurance policy can be used for other purposes, such as borrowing against the policy. However, any loan from the insurance policy must be paid back with interest.