Death Benefit
/deth BEN-uh-fit/
The amount paid to beneficiaries when the insured dies.
Definition
The death benefit is the amount of money the life insurance company pays to your beneficiaries when you die. For term and whole life, this is typically a fixed amount. The death benefit is generally income tax-free to beneficiaries.
Example
When Michael passed away, his $1 million death benefit provided financial security for his wife and children.
More Life Insurance Terms
Coverage for a specific period with no cash value.
Permanent coverage with guaranteed cash value.
Flexible permanent coverage with adjustable premiums.
The person who receives the insurance payout.
The savings component of permanent life insurance.
The stated amount of coverage on a life insurance policy.
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