About the Death Benefit

The Death Benefit is the amount payable to the named beneficiary or beneficiaries upon the death of the insured. In general, the death benefit amount is not subject to income taxes. These proceeds may then be used by the beneficiary to provide for immediate needs such as: funeral expenses, unpaid medical bills, debt, estate taxes, or any other financial obligations of the beneficiary. In the case of an insured's untimely death, the proceeds may be used to cover children's college expenses and as replacement for the income that would have been generated by the insured.

 

The death benefit options may vary depending upon the type of life insurance purchased and the available policy provisions. A basic death benefit will provide a face amount or specified amount that remains level throughout the period of coverage. Other death benefit options provide for an increasing death benefit that includes a specified amount in addition to the accumulated cash value in the policy. Another type of death benefit option may provide for a return of premium payments in addition to the specified amount of coverage.

 

Keep in mind that loans and withdrawals will reduce the death benefit amount payable to the beneficiary and that some death benefit options are only available at an additional cost.

 

There are many factors to consider when selecting a death benefit option. Your professional financial planner can review your death benefit options with you and assist in selecting an option that best suits your particular needs.