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Simple English definitions for legal terms
face of policy
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A quick definition of face of policy:
Face of policy: The term "face of 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 amount or face value. The face of policy is the maximum amount that the policyholder can receive, regardless of the actual cost of the loss or damage. For example, if a policy has a face value of $100,000, the insurance company will pay out up to $100,000 for any covered claim.
A more thorough explanation:
Definition: The term "face of 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 amount" or "face value" of the policy.
Examples:
- John purchased a life insurance policy with a face value of $500,000. This means that if he were to pass away, his beneficiaries would receive a payout of $500,000.
- Mary's car was damaged in an accident, and she filed a claim with her auto insurance company. The face value of her policy was $10,000, which is the maximum amount that the insurance company would pay out for the damages.
These examples illustrate how the face of policy represents the maximum amount of money that an insurance policy will pay out in the event of a claim. It is important for policyholders to understand the face value of their policies so that they can ensure they have adequate coverage for their needs.