Life insurance is a contract between an insurance company and a person whereby the insurance company promises to pay a death benefit (the face amount of the life insurance policy) to the beneficiary of the life insurance upon the death of the insured person.
In return, the owner of the life insurance policy agrees to pay a premium to the insurance company. Usually, life insurance premiums are paid on regular installments each month or year.
The insured person is the person who is named as the insured and who the life insurance policy insures in case of death.
The beneficiary is the person or persons chosen by the owner of the life insurance policy to receive the proceeds from the life insurance upon the death of the insured person.
Life insurance is used as a way to guarantee financial security for your family's future if you are no longer there to provide for them financially.
The two basic types of life insurance are Term and Permanent.
Learn about the advantages and disadvantages of term life insurance versus permanent life insurance coverage.