The Lump Sum Death Benefit--Should It Be Changed?

Social security has paid more than $6 billion in lump-sum death benefits since 1940, the first year payments were made. The original concept of lump-sum death benefits was to provide a return on the social security contributions of wage earners. However, the concept has been changed to include a modest payment toward the costs associated with death. Various proposals have been made to eliminate, or in some way alter, the current benefit. One proposal by the Department of Health and Human Services would significantly reduce the cost of the lump-sum death benefit payment; however, most individuals currently insured for this benefit would no longer be eligible. Another proposal by the Advisory Council on Social Security would almost double the current annual cost.