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Life insurance is a contract between an insurer and a policyholder where the insurer guarantees to pay a sum of money, known as a death benefit, to named beneficiaries upon the death of the insured person. In exchange, the policyholder agrees to pay regular premiums.
The primary purpose of life insurance is to provide financial security for your dependents, replacing the lost income and covering essential expenses when you pass away.Permanent life insurance remains in force for the insured's entire life, provided premiums are paid. It combines a death benefit with a cash value component.How it Works: A portion of each premium goes toward the cash value, which grows on a tax-deferred basis. The policyholder can typically borrow against this cash value or use it to pay premiums.
