Death Benefit

Regarding life insurance, a death benefit refers to the benefit of a life insurance policy to pay out upon the death of the insured, a lump sum to his or her beneficiaries. This is one of the many benefits associated with a life insurance policy. The amount of this benefit or the amount paid out is defined in the policy, as is the recipient of this benefit.

Other insurance policies may include a death benefit. That is, in the event of the policyholder’s death, the insurance company will pay out a sum. For example, many car insurance policies include a death benefit which pays the financed vehicle’s installments should the owner be killed or become disabled. Home insurance policies may include this as well. Such policies guarantee that the financier does not lose money and are often referred to as credit life insurance.