Which term is used to describe the amount paid to beneficiaries upon the insured's death?

Which term is used to describe the amount paid to beneficiaries upon the insured's death?

• A. Living benefit
• B. Death benefit
• C. Cash account
• D. Loan value

Answer: (B)

In life insurance, the amount paid to beneficiaries when the insured dies is called the death benefit. This payout provides financial support to loved ones after the insured’s death and is the policy’s primary purpose. Other terms describe different features: a living benefit is money you can access while you’re alive under certain conditions, such as a terminal illness; cash value is the savings portion of a permanent policy that grows over time and can be borrowed against or withdrawn; loan value is the amount you can borrow against that cash value, which can reduce the death benefit if not repaid.

In life insurance, the amount paid to beneficiaries when the insured dies is called the death benefit. This payout provides financial support to loved ones after the insured’s death and is the policy’s primary purpose. Other terms describe different features: a living benefit is money you can access while you’re alive under certain conditions, such as a terminal illness; cash value is the savings portion of a permanent policy that grows over time and can be borrowed against or withdrawn; loan value is the amount you can borrow against that cash value, which can reduce the death benefit if not repaid.