Understanding the Different Types of Life Insurance Death Benefits

The primary purpose of any life insurance policy is to provide a death benefit to your designated beneficiaries if you die. There are various types of life insurance, and while all policies have a death benefit, different types of life insurance offer different options for how the death benefit is designed.

Types of Death Benefits

As mentioned, different policies have different types of death benefits. Two common death benefit types are level death benefits and increasing death benefits.

Level Death Benefit

With a level death benefit, the life insurance payout amount stays the same throughout the duration of the policy.
Term life insurance policies usually offer a level death benefit.
Some universal and whole life insurance policies also offer a level death benefit, but because they have an additional investment or cash value component, the death benefit works differently. If you choose a universal or whole life policy with a level death benefit, the policy's insurance component decreases as the policy's cash value increases.

Increasing Death Benefit

If you choose a permanent policy, such as whole or universal, you may have an increasing death benefit option, meaning the death benefit will increase as the policy's cash value increases.

Get Help From an Agent

Understanding life insurance and what policies are available in your area can be confusing. That's why it helps to talk to someone who knows the life insurance landscape and can help you in your search.

To learn more about your life insurance options, speak with a licensed agent at 1-855-303-4640. Read through some of our guides listed below to learn more about how life insurance works.

*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.