The difference between the face value of a life insurance policy and its cash value is the:

Market value refers to the price an asset would sell for in a competitive auction setting. In the context of life insurance, market value does not apply because the face value and cash value of a policy are predetermined and not subject to market fluctuations. Thus, market value is not a relevant term when discussing the difference between face value and cash value.

Assumed amount is not a standard term used in life insurance to describe the relationship between face value and cash value. It may imply a hypothetical figure or estimate, but it does not accurately capture the actual financial distinction between the two values in a life insurance policy.

Term value refers to the value associated with term life insurance, which provides coverage for a specified period without a cash value component. Since term insurance does not accumulate cash value, this term does not apply to the difference being discussed between face value and cash value in permanent life insurance policies.