Death benefit

Life insurance terminology shouldn't be confusing. Here is the definition of death benefit.

The death benefit is how much the life insurance policy pays to the beneficiary upon the policyholder's death. This amount is considered the "face value" of the policy. It is usually untaxed and paid to beneficiaries in a single lump sum.

Depending on the life insurance policy you purchased, the death benefit can be fixed or variable. If you purchase a term life policy with a $250,000 face value, your death benefit is $250,000. If you purchase a variable life insurance policy with a $250,000 face value, your death benefit could be lower or higher based on how the investments your policy is tied to perform over time.


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