Life Insurance

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Life Insurance


Many different types of life insurance are available to meet all sorts of needs and preferences. Depending on the short- or long-term needs of the person to be insured, the major choice of whether to select temporary or permanent life insurance is important to consider.

What Is Life Insurance?


Life insurance is a contract between an insurer and a policy owner. A life insurance policy guarantees the insurer pays a sum of money to named beneficiaries when the insured dies in exchange for the premiums paid by the policyholder during their lifetime.

For the contract to be enforceable, the life insurance application must accurately disclose the insured’s past and current health conditions and high-risk activities.

Key Takeaways


Life insurance is a legally binding contract that pays a death benefit to the policy owner when the insured dies.

For a life insurance policy to remain in force, the policyholder must pay a single premium up front or pay regular premiums over time.

When the insured dies, the policy’s named beneficiaries will receive the policy’s face value, or death benefit.

Term life insurance policies expire after a certain number of years. Permanent life insurance policies remain active until the insured dies, stops paying premiums, or surrenders the policy.