Can you explain cash value vs the face amount life insurance?

Cash value and face amount are two important components of a life insurance policy, and understanding the difference between the two can help you make informed decisions about your life insurance coverage. The face amount, also known as the death benefit, is the amount of money that will be paid out to the policy's beneficiary in the event of the insured's death. This is the primary purpose of a life insurance policy, and the face amount is usually chosen based on the financial needs of the insured's beneficiaries, such as paying off debts, covering living expenses, or funding future expenses like college tuition. Cash value, on the other hand, is a component of certain types of life insurance policies, such as whole life or universal life insurance. These policies are sometimes called cash value life insurance policies, because a portion of the premium payments made by the policyholder is set aside and invested by the insurance company. Over time, this investment grows and accumulates cash value. The cash value of a life insurance policy can be used in a few different ways. One option is to use it to pay premiums, which can help keep the policy in force if the policyholder is struggling to keep up with premium payments. Another option is to borrow against the cash value, using it as collateral for a loan. This can be a useful option for individuals who need access to cash but don't want to take out a traditional loan. However, it's important to note that borrowing against the cash value can reduce the death benefit, and any outstanding loans may need to be repaid before the full death benefit is paid out to the beneficiary. In summary, the face amount is the amount of money that will be paid out to the beneficiary upon the insured's death, while cash value is a component of certain types of life insurance policies that accumulate over time and can be used for a variety of purposes, such as paying premiums or borrowing against the policy.