Life insurance is a contract where you pay an insurance company premiums in exchange for a guaranteed payment (the death benefit) to your beneficiaries when you die. It provides financial security for your loved ones, helping cover expenses like debt, living costs, and funeral expenses. 

Here's a more detailed explanation:

• Beneficiaries:

  These are the people or entities you designate to receive the death benefit, such as your spouse, children, or estate. 

• Purpose:

  Life insurance aims to provide financial protection and security to your family or other beneficiaries in the event of your death. It can help replace your income, pay off debts, cover living expenses, and handle funeral costs. 

• Different Types:

  There are various types of life insurance, including:

  • Term Life Insurance: Provides coverage for a specific period, typically 10, 20, or 30 years. 

  • Permanent Life Insurance: Provides lifelong coverage and may include a cash value component. 

    • Whole Life Insurance: Offers guaranteed premiums, a guaranteed death benefit, and a guaranteed cash value. 

    • Universal Life Insurance: More flexible than whole life, allowing for adjustments to premiums and death benefits. 

• Contract:

  Life insurance is a legally binding agreement between you (the policyholder) and an insurance company. 

• Death Benefit:

  The payout, also called the death benefit, is a lump sum of money paid to your beneficiaries when you die.