Life InsuranceLife insurance is a contractual agreement between a policyholder and a life insurance company. Policyholders agree to make premium payments to the company, and the company agrees to pay your beneficiaries a sum of money if you die. All life policies have a minimum of 4 parts:
- A premium
- A death benefit
- A term period
- A cash value
Life insurance is a way of providing income replacement for financial dependents (the beneficiaries) after the insured person dies. It is intended to replace lost income and pay for any additional expenses that are experienced by those left behind when a family member who contributes income or services to a household is lost. It can also be used for final expenses like medical bills or funeral costs that survivors would have to pay when a death occurs. Life insurance is an important part of financial planning for families and individuals.