Advertisement

Employee Death Benefits

What Does Employee Death Benefits Mean?

Employee death benefits refer to the amount to be paid by the employer to the dependents of the employee upon the latter’s death.

Advertisement

Insuranceopedia Explains Employee Death Benefits

The widow or widower of the employee may claim employee death benefits for themself and on behalf of the employee’s children. According to the law, death benefits paid to the beneficiaries or to the estate of the deceased are excluded from the gross income of the beneficiary as long as the amount does not exceed $5,000. The exception applies even if the amount due was paid as a lump sum or otherwise; or made in favor of an individual, a corporation, a partnership; or paid directly or in trust. Consequently, the exemption does not apply to amounts payable to the employee before their death, such as compensation for services, payments for unused leaves, and bonuses.

Advertisement

Share this Term

  • Facebook
  • LinkedIn
  • Twitter

Related Reading

Tags

InsuranceLife InsuranceCommercial LinesClaimsGroup Benefits

Trending Articles

Go back to top