In life insurance death benefits are benefits paid to beneficiaries in the event of death. The payout amounts depend upon the life insurance policy.

  • Death benefits are not considered income and are typically “tax free”. You can learn more about the tax implications of death benefits from the IRS.
  • Death benefits can be paid in lump-sum amounts or installments.
  • Some life insurance will let you take death benefits, at least in part, for long-term care. This is known as accelerated death benefits.
  • Some life insurance policies let you take “living benefits” which are amounts that can be paid out of death benefits during the policy holders life.
  • Term life insurance only pays out in death benefits, while whole life typically pays death benefits and cash value.
  • Riders can affect the way death benefits are paid out.
  • Universal┬álife insurance allows the policy holder to adjust premiums and death benefits throughout the policy.