What Is Life Insurance?

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

Life insurance can help your loved ones deal with the financial impact of your death.

The death benefit paid from a life insurance policy is a tax-free, lump-sum amount that can be used to:

• replace your income so your family can maintain their standard of living

• provide for your children or dependents

• pay for funeral expenses

• pay off your debts

• make a gift to charity

You may also choose to leave the money to your estate or to a trust.