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death benefit limitation

The death benefit limitation refers to a limit every life insurance company has on the amount of life insurance a person can buy.

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The amount of insurance must be a reasonable amount that would be needed by the survivors in the event of the insured's death. Many companies set this limit based on the income of the insured and the situation they are in. Most limits are sufficiently high enough to provide the insurance needed for any ordinary situation.

Related Terms

The death benefit is the amount payable by a life insurance policy in the event of the death of the...