What is the definition of Death Benefit?

The Death Benefit is the amount paid to the beneficiaries in case the annuitant or the insured person dies.

For life insurance policies, this is basically the face amount of the insurance policy, plus additional riders or coverage that may apply. For example, Sam has a life insurance policy with a face amount of $50,000 and an accidental death rider. If Sam dies because of sickness, the beneficiaries will get $50,000. However, if Sam dies because of an accident, the death benefit will also pay an amount equal to the face amount. The beneficiaries will receive $100,000 in death benefits.

For annuity contracts, the death benefit is the money the beneficiaries will receive if the annuity owner dies before the annuity date and before the annuity payments begin.

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