The dollar amount of coverage stated on a life insurance policy, also known as the death benefit amount. It is the amount the beneficiary will receive upon the insured's death, though the actual payout may be higher if the policy has accumulated dividends or riders.
Related Terms
Beneficiary
The person or entity designated to receive the proceeds of an insurance policy when the insured event occurs. In life insurance, the beneficiary receives the death benefit. You can name primary and contingent beneficiaries in case the primary is unable to collect.
Premium
The amount you pay to an insurance company to maintain your coverage, typically billed monthly, quarterly, or annually. Premiums are determined by factors such as risk level, coverage amount, deductible, location, and claims history.
Death Benefit
The amount of money paid to the beneficiary when the insured person dies. The death benefit is generally income-tax-free for the recipient. It can be paid as a lump sum, installments, or an annuity depending on the policy and beneficiary preferences.