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Death Benefit

The amount a life insurance policy pays to your beneficiaries when you die.

What it actually means

The death benefit is the core payout of a life insurance policy — the tax-free lump sum (in most cases) your named beneficiaries receive. It's set when you buy the policy and is the number most "how much life insurance do I need" calculations are trying to size correctly.

Example: A $750,000 death benefit is meant to replace income, pay off debts, and fund future costs like education for those left behind.

See it in context

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Related terms

Term Life InsuranceBeneficiaryCash Value

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