When the cash value of a life insurance policy equals the face amount and proceeds are paid to the policyowner, this is known as the policy's what?

The correct answer is endowment. An endowment policy is a specific type of life insurance that combines both insurance and savings aspects. It is designed to pay a specified sum (the face amount) either upon the death of the insured before the end of the policy term or upon reaching the end of the term, at which point the cash value of the policy equals the face amount. This means that when the policy matures, and the cash value matches the face amount, the proceeds are paid out to the policyowner.

This feature is characteristic of endowment policies, distinguishing them from other types of insurance. In contrast, term insurance usually only pays a death benefit if the insured passes away during the term and doesn't accumulate cash value. Conversion refers to the process of changing a term policy into a permanent policy, while the beneficiary is the person designated to receive the death benefit, which does not pertain to the cash value aspect discussed in this context.