Death benefit

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Death Benefit

In life insurance and annuities, the amount of money that is paid to the policyholder's survivor(s) upon the policyholder's death. That is, the amount may be a lump sum determined at the outset of the policy or annuity that is paid when the policyholder dies, or it may be a monthly payment that begins to be paid when the policyholder passes away and remains payable until the survivor's death. The former death benefit is more common in life insurance and the latter is more common in annuities.

Death benefit.

A death benefit is money your beneficiary collects from your life insurance policy if you die while the policy is still in force.

In most cases, the beneficiary receives the face value of the policy as a lump sum. However, the death benefit is reduced by the amount of any unpaid loans you've taken against the policy.

Some retirement plans, including Social Security, also provide a one-time death benefit to your beneficiary at the time of your death.

References in periodicals archive ?
In the present article, we examine the death benefit switch option in a pool of increasing universal life policies with the goal of enhancing the understanding of this feature.
Finally, the death benefit goes to whoever is named as beneficiary directly upon proof of death.
Additional riders available Accidental Death Benefit, Waiver of
This type of policy combines a death benefit with a savings account that can be invested at the policyholder's discretion.
For example, similar to death benefits in a qualified retirement plan, the value of life insurance protection provided by a WBP trust is currently taxable to the insured individual.
If you want your heirs to have money to pay estate taxes, you can design the policy with a higher death benefit and lower cash value.
Butcher explained that the retained death benefit transaction is a true win-win for the senior policy seller because a life settlement provider assumes the premium payments for unwanted policies, but the policyholder retains a percentage of the face value payout for beneficiaries.
The ILIT is funded with the minimum needed to purchase a death benefit through the end of the GRAT's term.
This special rule also applies to arrangements between a corporation and a shareholder in which the corporation pays, directly or indirectly, all or some of the premiums and the beneficiary of all or some of the death benefit is, or would be reasonably expected to be, a person designated by the shareholder.
Shortly after her son's death Karen Langley was granted a death benefit of $95,000, which was to be paid out over the course of five years at a rate of $336 a week.
Term insurance is a contract for a finite time period (say from one to five years) which guarantees to pay a specific death benefit, usually in increments of $100,000.