What is Life Insurance?
Life insurance is a type of insurance that pays out a sum of money to a designated beneficiary upon the death of the insured person. It is designed to provide financial protection for the policyholder's loved ones in the event of their death.
There are two main types of life insurance: term life insurance and permanent life insurance.
Term life insurance provides coverage for a specific period of time, typically 10, 20, or 30 years. If the policyholder dies within this time frame, the beneficiary will receive the payout. If the policyholder does not die within the term, the policy will expire and the beneficiary will not receive a payout.
Permanent life insurance, also known as whole life insurance, provides coverage for the entire lifespan of the policyholder. In addition to providing a death benefit, permanent life insurance also has a savings component that allows the policyholder to build cash value over time. Some types of permanent life insurance include universal life insurance, variable life insurance, and variable universal life insurance.
Life insurance can be an important part of a financial plan, as it can provide financial security and peace of mind for the policyholder and their loved ones. It is important to carefully consider your needs and the options available when choosing a life insurance policy.