There is no telling what would happen to your spouse and dependents after your death. There is, however, the assurance of knowing that even after your death your beneficiaries can still benefit from you. This benefit is known as “death benefit”. It is important to learn about death benefit because it will be one of the most useful things that you can pass down to your family. Death benefit, also known as “survivor benefit”, is the money your beneficiary or survivor collects from your life insurance policy if at the event of your death the policy you are still under the insurance policy. Death benefit can also be given as a one-time benefit by retirement plans such as Social Security.
There are two ways of getting death benefit. One way is to get it as a lump sum, and another way is to get is an annuity. The lump sum is similar to the one-time benefit usually given by retirement plans because the lump sum will be given one time only, but it is the total amount of the death benefit left by the deceased individual’s insurance policy. As for the annuity, you can get it as a set/fixed or variable amount of monthly benefit and it might also include a cost of living adjustment when necessary. If you choose the set/fixed amount option then you can get a set amount of benefit every month. If you choose the variable option then the amount of your benefit could change every month because it can or will be based on interest. The ones who decide how they get the death benefit would be the beneficiaries.
The beneficiary is not limited to a family member. It can also be any organization or charity that you wish to benefit from you. This is because you choose who the beneficiary will be. This is done by naming your beneficiary on your life insurance policy. By naming them as your beneficiary, they will be able to do anything with the death benefit they can get from you. However, they will also be rendered responsible for everything you have left them, which means that they will also be responsible for your debts and the like. This means that you need to let your beneficiary know that he or she will be your beneficiary so as to prepare them for the responsibilities they will get once they acquire the death benefit.
The death benefits you or your beneficiary can get are not necessarily all the money left in the deceased person’s insurance policy. The death benefit can also be just a percentage of the deceased person’s annuity. This will depend on the insurance policy of the deceased individual. There will also be a portion of the benefit which will be considered taxable, and again it will depend on the type of the deceased individual’s insurance policy.