Life insurance is a contract between an insurance company and a policyholder that provides financial security for the policyholder’s loved ones after their death. The policyholder pays premiums to the insurance company, who then agrees to pay a death benefit to the policyholder’s chosen beneficiaries. The money can be used for a variety of purposes, such as replacing lost income, paying for final expenses, or funding post-secondary education.

There are two main types of life insurance policies: Term life insurance and Permanent life insurance.

Term life insurance covers the policyholder for a set period of time, such as 10, 20, or 30 years. If the policyholder dies during the coverage period, the policy will pay benefits to their beneficiaries. Permanent life insurance pays out no matter when the policyholder dies, as long as they keep up with their premium payments. Permanent life insurance policies can also offer cash value in addition to death benefits, which can help supplement retirement savings.