Understanding Life Insurance: A Comprehensive Guide
Life insurance is a critical financial tool that provides security and peace of mind for individuals and their families. It serves as a safety net, offering financial protection to beneficiaries in the event of the policyholder's death. This article explores the various types of life insurance, their benefits, how they work, and factors to consider when purchasing a policy. What is Life Insurance? Life insurance is a contract between an individual and an insurance company, where the insurer agrees to pay a specified sum of money to the designated beneficiaries upon the death of the insured. In exchange, the policyholder pays regular premiums. The primary purpose of life insurance is to provide financial support to loved ones, covering expenses such as funeral costs, mortgage payments, education, and daily living expenses. Types of Life Insurance Life insurance policies can be broadly categorized into two main types: term life insurance and permanent life insurance. Each has its ow...