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Variable Death Benefit Meaning & Definition

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Definition of Variable Death Benefit

Variable death benefit is the amount of a death benefit paid to a beneficiary that is based on the investment results of the insurance company’s separate account. This amount is over the contracts minimum guaranteed death benefit.

Applying "Variable Death Benefit" to Securities Exams:

Traditional whole life and term life will provide a stated or known death benefit in the case of the insured’s death. A variable insurance policy will offer a death benefit that varies in accordance with the performance of the separate account. If the separate account does well over a long period of time the death benefit may be significantly higher than the minimum stated benefit.

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