What Is Life Insurance?
Life insurance is a contract between you and an insurance company that provides financial protection to your loved ones after you pass away. In exchange for regular payments (called premiums), the insurance company promises to pay a lump sum of money (called a death benefit) to your chosen beneficiaries when you die.
There are two types of Life Insurance: Term Life Insurance and Permanent Life Insurance.
Permanent Life Insurance
- Lasts your entire lifetime as long as premiums are paid
- Includes a cash value component that can grow over time
- More expensive, but offers lifelong protection and potential savings
Term Life Insurance
- Provides coverage for a set period of time (like 10, 20, or 30 years)
- Generally more affordable
- Pays out only if you pass away during the term
Why do People Get Life Insurance?
- To replace lost income for their family
- To cover funeral and burial expenses
- To pay off debts like a mortgage or car loan
- To leave behind a legacy or inheritance
- To protect a business or key financial plan
Life insurance offers peace of mind—knowing that your family or loved ones will have financial support even when you’re no longer here.