How Much Money Do You Get From Life Insurance?

If you are the owner of the life insurance policy, you are able choose the amount of life insurance that you want to go to your beneficiary upon your death.

It is called the face amount of the life insurance policy. When paid out, it is called the death benefit.

As the owner of the policy, you do not get anything from your life insurance policy unless you have a Whole Life or Universal Life plan, from which you can take cash value as a loan (if there is cash value inside the policy) or surrender; or Return of Premium Term Life Insurance, which pays back almost all of the premiums you paid for your policy, if you live past the end of the term for tour term life plan.

If the life insurance is for $500,000 of coverage, the insurance carrier pays out a $500,000 death benefit to the beneficiary when the insured dies, free from income tax.

If you have permanent life insurance coverage with cash value and there's a loan on the policy, the insurance carrier will take out the loan amount and any interest to be paid the insurance company from the proceeds payout, and give the balance to the beneficiary.

Learn more about life insurance terms and how life insurance works