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The death gratuity used to be $12,000 until 2005, when Congress passed a law that substantially increased it to $100,000. It also made the increase retroactive to Oct. 7, 2001, so families who had lost loved ones in that time frame got the same payment. The year 2005 was also when Congress increased the size of the life insurance paid to military families from $250,000 to $400,000. The increased payment was also made retroactive to October 2001.