What is Life Insurance?

[Learners Quest]

Life insurance is a contract between you and an insurance company. You pay premiums, and the company pays a death benefit to your beneficiaries if you die. The death benefit can help your family cover expenses like your mortgage, college tuition, or other debts.

There are two main types of life insurance: term life insurance and whole life insurance. Term life insurance provides coverage for a set period of time, typically 10, 20, or 30 years . Whole life insurance provides coverage for your entire life .

When you purchase life insurance, you’ll need to decide how much coverage you need . A life insurance calculator can help you determine how much coverage you need, or you can work with a life insurance agent .

Once you have a life insurance policy in place, it’s important to review your coverage periodically to make sure it still meets your needs. Life changes, such as getting married, having children, or buying a new home, can impact your life insurance needs .

Finally, it’s important to keep in mind that life insurance is not an investment. The death benefit is paid to your beneficiaries tax-free, but you won’t receive any money back if you outlive your policy.

 

[Mika]

I think I will have to oppose the OP's statement that "life insurance is not an investment." Well, life insurance is an investment, based on the type of life insurance you have bought, you can either reap the return on your investment (premiums paid for your policy) in your lifetime (if you have bought term life insurance) or upon your death, mostly by your nominee (the whole life insurance policy). When buying a life insurance policy the most important thing to consider is whether you can pay the premiums or not. You will have to pay the premiums for a long time.

 

[saoussen5765]

I think I will have to oppose the OP's statement that "life insurance is not an investment." Well, life insurance is an investment, based on the type of life insurance you have bought, you can either reap the return on your investment (premiums paid for your policy) in your lifetime (if you have bought term life insurance) or upon your death, mostly by your nominee (the whole life insurance policy). When buying a life insurance policy the most important thing to consider is whether you can pay the premiums or not. You will have to pay the premiums for a long time.

I think it is an obligation because when running a company you are obliged to be involved in an insurance investment and not to be free or somone without any responsibility or insurance contract.