What are the benefits of life insurance?

Life insurance comes with a number of advantages. One of the biggest draws is being able to financial support your family members after you pass away. Most life insurance policies include a death benefit, which your beneficiaries receive after your death.

What are the different types of death benefits?

This common type of death benefit is a set, unchangeable amount. For example, whole life insurance policies have fixed death benefits. Some term life insurance policies have fixed death benefits, too, but other term life policies allow you to adjust a death benefit, such as lowering the amount.

What is a death benefit?

A death benefit is a payout to the beneficiary of a life insurance policy, annuity, or pension when the insured person or annuitant dies. Beneficiaries must submit proof of death and proof of the deceased’s coverage to the insurer to receive the benefit. Death benefits from life insurance policies are not subject to ordinary income tax.