Definition of 'Death Benefit'
There are a few different types of death benefits:
* **Term life insurance:** This type of insurance provides a death benefit for a specified period of time, typically 10, 20, or 30 years. If the insured person dies during the term of the policy, the beneficiary will receive the death benefit. If the insured person survives the term of the policy, the death benefit will not be paid.
* **Permanent life insurance:** This type of insurance provides a death benefit for the insured person's entire life. The death benefit will be paid regardless of when the insured person dies.
* **Universal life insurance:** This type of insurance combines the features of term life insurance and permanent life insurance. The death benefit can be increased or decreased over time, and the premiums can be paid in a variety of ways.
The amount of the death benefit is typically based on the insured person's age, health, and occupation. The death benefit can also be increased by purchasing additional coverage.
Death benefits are an important part of estate planning. They can help to ensure that the financial needs of the insured person's family are met in the event of their death.
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