Does Net Worth Include Life Insurance Policy? 
Only the cash value inside your life insurance policy is included in your net worth while you 're living . The face amount of the policy is not included in the calculation . If/when a claim on the policy is made by the beneficiary , the amount paid out -LRB- the face amount less any outstanding loans/interest on the policy -RRB- may be included in the calculation of your estate for estate tax purposes . Many people create ILITS -LRB- and/or other types of trusts -RRB- to put the policy into to control how the proceeds are distributed and to minimize the cost of transferring their assets to their loved ones . 