Life Insurance: What Is It?

You and an insurance provider enter into a contract for life insurance. In essence, the insurance company will give your beneficiaries a lump sum, known as a death benefit, in return for your premium payments.

The funds are available for any use by your beneficiaries. This frequently entails paying regular payments, a mortgage, or college expenses for a child. Having life insurance as a safety net can ensure that your family can continue to live in their current residence and pay for the expenses you had budgeted for.

Term and permanent life insurance are the two main categories. Whole life insurance and universal life insurance are examples of permanent life insurance that can offer lifetime coverage provides protection for a certain period.