Life insurance is a type of insurance policy that provides financial protection to the policyholder’s beneficiaries in case of the policyholder’s death. The policyholder pays a premium to the insurance company, and in exchange, the insurance company pays a lump sum of money to the policyholder’s beneficiaries upon the policyholder’s death. Life insurance policies vary in coverage, cost, and benefits, and can be purchased as a term policy or a whole life policy.

The primary purpose of life insurance is to provide financial security to the policyholder’s beneficiaries in case of the policyholder’s untimely death. The beneficiaries can use the lump sum of money to pay for funeral expenses, outstanding debts, and other financial obligations. Life insurance policies can also provide additional benefits, such as cash value accumulation, which can be borrowed against or withdrawn in case of financial emergencies.

There are different types of life insurance policies available, such as term life insurance, whole life insurance, universal life insurance, and variable life insurance. Each policy has its own set of benefits, costs, and limitations, and it is important for policyholders to choose the policy that best suits their needs and budget.