death benefit

noun
Updated on: 26 Jul 2017

Definition of death benefit

  1. :  money payable to the beneficiary of a deceased

First Known Use of death benefit

1867


Financial Definition of DEATH BENEFIT

death benefit

What It Is

A death benefit is a payment to the beneficiary on an annuity, pension, or life insurance policy upon the death of the annuitant or policyholder.

How It Works

Also called a survivor benefit, a death benefit may come in the form of a one-time payment on a life insurance policy or in a series of income payments that are a percentage of those granted to the annuitant prior to death. For instance, as the beneficiary on a life insurance policy, a surviving spouse will be entitled to a one-time monetary payment upon the death of the other spouse as specified in the policy. Likewise, upon the death of an annuity holder, the beneficiary will receive ongoing annuity payments at a percentage of those received by the annuitant.

Why It Matters

Death benefits are the way in which annuities and life insurance policies compensate those close to or dependent upon the deceased policyholder for the costs associated with death (e.g. funeral expenses) and potential loss of income.


DEATH BENEFIT Defined for English Language Learners

death benefit

noun

Definition of death benefit for English Language Learners

  • : money that an insurance company pays to the family of someone who has died because that person had life insurance


Law Dictionary

death benefit

noun

Legal Definition of death benefit

  1. :  money payable to the beneficiary of a deceased as a benefit (as under a policy of life or accident insurance or a pension plan)

Additional Notes on death benefit

The right to death benefits is generally terminated in cases of fraud, as when an insured commits suicide after purchasing a policy or when the beneficiary murders the insured.

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