Life insurance is a contract between an individual and an insurance company that provides a financial payout to designated beneficiaries upon the policyholder’s death. This payout, known as a death benefit, helps loved ones cover expenses such as funeral costs, outstanding debts, and living expenses.
Life insurance can also serve as a form of financial security for long-term needs, like college tuition or retirement planning. There are various types of life insurance, such as term life and whole life, each offering different levels of coverage and benefits to meet individual needs and goals.