Define: Death Benefit

UK Accounting Glossary

Definition: Death Benefit



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Full Definition of Death Benefit


Death benefit is the sum amount paid by the insurance company to the policyholder upon death. In and of itself, the death benefit constitutes the face value of the life insurance policy as per the original contract. Depending on a type of policy, the death benefit may be accompanied by dividends, as well as other supplemental benefits. Outstanding loans borrowed against the policy, loan interest rates, and other policy withdrawals are typically excluded from the death benefit. Once again, depending on the insurance coverage terms, accidental death benefits or other accelerated riders may be subtracted from the death benefit. When a death occurs, the beneficiaries of the policy are not taxed on the death benefit. Sometimes the death benefit is referred to as the “principal sum.”


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Death Benefit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 24, 2020 https://payrollheaven.com/define/death-benefit/.
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Death Benefit. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/death-benefit/ (accessed: February 24, 2020).
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Death Benefit. PayrollHeaven.com. Retrieved February 24, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/death-benefit/

Definition Sources


Definitions for Death Benefit are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 7th February 2020.