YOU ASK:
What is the definition of Defined Benefit Plan?
WE ANSWER:
A Defined Benefit Plan provides a schedule of benefits that are to be received by an employee when he retires.
This plan is a kind of retirement plan sponsored by employers. The benefit amount is usually computed based on the number of year the employee served the company multiplied by a certain percentage. Other factors that come into play include the age when the employee retires, as well as the employee's average salary before retirement.
The benefits may either be paid as a lump sum or as monthly payments for the retired employee's lifetime. There are also some plans that pay the beneficiaries death benefits.
These payments really depend on the company or the employer.
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More insurance terms around defined benefit plan:
- Defined Contribution Plan
- Demand Deposit
- Demutualization
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- Deregulation
- Derivatives
- Difference in Conditions
- Diminution of Value
- Direct Premiums
- Direct Sales/ Direct Response
- Deferred Annuity
- Deductible
- Decreasing Term Life Insurance
- Declined Risk Class
- Declaration
- Death Benefit
- Current Assumption Whole Life Insurance
- C-Share Variable Annuities
- Crop-Hail Insurance
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