ADDITIONAL DEATH BENEFIT Meaning and
Definition
-
Additional death benefit refers to a supplementary payout provided by an insurance policy in the event of the insured person's passing. It is an extra sum of money given to the designated beneficiaries on top of the basic death benefit already outlined within the policy. The purpose of the additional death benefit is to provide further financial support to the dependents and loved ones of the deceased policyholder.
This benefit is typically offered as an optional add-on to certain types of insurance policies, such as life insurance or accidental death and dismemberment insurance. Insurance companies may charge an additional premium for this enhanced coverage. The specific amount of the additional death benefit is predetermined at the time the policy is purchased and is often a percentage of the original death benefit.
The purpose of the additional death benefit is to help cover any additional expenses or financial demands that may arise following the policyholder's death. These expenses can include funeral costs, outstanding debts, mortgage payments, or the general financial security of the beneficiaries. The additional death benefit is aimed at providing an extra layer of protection and peace of mind in ensuring that the loved ones left behind are adequately supported during a difficult time.
In sum, the additional death benefit is an optional provision within an insurance policy that offers an extra payout to beneficiaries upon the death of the insured person, designed to provide added financial security and support beyond the basic death benefit.
