Description

The death benefit is a crucial sum that supports the policyholder's family, such as dependent parents, spouse, or children, in rebuilding their lives after the policyholder's death. This benefit is not subject to income tax deductions.

When the policy is initiated, the policyholder can opt to pay the death benefit either as a lump sum or in regular installments. For instance, based on the family's financial requirements, the death benefit can be disbursed as a lump sum or periodic payments. Beneficiaries need to provide proof of death to claim the death benefit.

The death benefit is typically not paid out in cases where the life insured commits suicide within 12 months of policy inception, in instances of homicide, death due to drug or alcohol intoxication, or self-inflicted injuries.

For example, Pulkit bought a term plan worth Rs.1 crore, naming his wife as the beneficiary. After paying premiums for 7 years, Pulkit passed away in a road accident. His wife received the death benefit since she was the designated beneficiary. The death benefit equaled the chosen sum assured at the policy's purchase.