What is a death benefit in a life insurance policy?

A death benefit in a life insurance policy specifically refers to the sum of money that is paid to the designated beneficiaries when the insured individual passes away. This financial payout is intended to provide financial protection and support for the insured's loved ones, helping them cover expenses such as funeral costs, outstanding debts, or lost income. The death benefit is a core feature of life insurance, designed to ensure that the beneficiaries receive the financial support they need in the event of the policyholder's death.

The other choices do not accurately reflect the function of a death benefit. For instance, the amount paid to the policyholder at retirement pertains to retirement products rather than life insurance. The cash value accumulated refers to permanent life insurance policies, which may build a cash value over time but is not the same as the death benefit. Lastly, the premium amount is the cost paid by the policyholder to maintain the policy and does not correlate to the financial support provided upon the insured's death.