What are Death Benefits?

Mary McMahon
Mary McMahon

Death benefits are sums which are paid out to the survivors of a decedent, classically the spouse and/or children of the deceased, although they may also be paid to parents or business partners. There are a variety of ways to obtain these funds, depending on one's nationality and employment, ranging from purchasing life insurance, to applying for them from government agencies. Many people are encouraged to think about death benefits if they have dependent children or a spouse who might be financially impacted by a death.

A death benefit might be paid out as a lump sum to help with funeral costs.
A death benefit might be paid out as a lump sum to help with funeral costs.

The idea behind death benefits is that when a wage-earner dies, it can be very difficult for the survivors to cope. In a family with only one wage-earner, a death can be devastating, forcing the survivors to seek work to support themselves, and even in a house with multiple incomes, it can still present a blow. These benefits are designed to help people support themselves, and they may provide total support, or just enough help for the survivors to get on their feet and become independent.

The idea behind death benefits is that when a wage-earner dies, it can be very difficult for the survivors to cope.
The idea behind death benefits is that when a wage-earner dies, it can be very difficult for the survivors to cope.

Death benefits may come in the form of a periodic payment, known as an annuity, which is usually issued once a month. They can also be presented in a lump sum. Generally, people have an option to choose one or the other when establishing a benefits plan. Survivors should be aware that these funds may be considered taxable; it's a good idea to consult an accountant or attorney about tax responsibility.

Life insurance is one of the simplest ways to get death benefits. In a life insurance policy, one or more people are named as the beneficiaries in the event of a death, and these individuals will receive funds after the policy-holder passes away. Some employers also offer death benefits as part of their compensation packages, often in the form of a partial or full salary paid to a spouse or another surviving family member. Some governments or government agencies, such as the military provide a lump sum benefit to help with funeral costs, or to support minor children until they come of age.

Many people find death benefits extremely helpful. However, they are sometimes exploited. People should be aware when planning funerals that many funeral homes research benefits packages extensively, and they may be aware of exactly how much money a surviving family member has access to. If a quoted price for a funeral is suspiciously similar to a lump sum death benefit or a funeral assistance benefit, survivors may want to push for a price list, which they are entitled to see by law in many nations, or they may want to take their business elsewhere. Hospitals are also unafraid to push for as much money as possible from surviving family members after someone has died from an illness or catastrophic accident, and the accounts payable department is often skilled at finding out how much money can be extracted.

Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a wiseGEEK researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

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Discussion Comments


Greenweaver-I wanted to add that for survivors of members of the military, the veterans death benefits are divided into two categories.

One category is death in service, while the other category is death after service.

VA death benefits for those surviving members of family of our service members can receive full Social Security benefits under certain circumstances.

For a full benefits, the widow should be 65, but it can be reduced to 60 in the survivor is caring for the deceased child's that happens to be under 16.

In order to receive benefits from a military member that died after service, the surviving spouse has to submit to government insurance policy, the marriage certificate, the discharge certificate which is also referred to as the DD 214, the Social Security number, and the death certificate.

Also, the VA offers additional programs on its website. If you're not sure of what to do you can contact the closest office to you by dialing 1- 800-827-1000.


I understand that the life insurance death benefit is paid out to surviving spouses.

Often the deceased had either a term life insurance policy or a whole life's or universal policy.

The insurance policy is paid out only if the policy holder dies during the stated term of the insurance.

Whole life insurance or universal insurance has attached cash value associated with the plan the term policy does not.

The payout can be made as a lump sum or an annuity with set monthly payments.

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