When you purchase a life insurance policy, you agree to pay a premium to the insurance company, usually once a month or once a year, and the life insurance company agrees to pay a certain amount to your beneficiaries when you die.
Most people buy life insurance to replace their lost income, provide money to pay their final expenses, and to pay off any debt they may leave behind.
The death benefit is paid out usually free from any federal income tax. Your beneficiaries can choose to use the proceeds for any purpose they choose.
Life insurance can help you guarantee your loved ones have financial security if you are no longer there to provide for them.