Life insurance is a policy, or contract, between you, the policy holder, and an insurance company (insurer). In exchange for your payments, commonly called premiums, the insurer provides death benefits to your beneficiary after your death. Typically, the death benefit is a lump sum payment that covers expenses such as your funeral and other bills. However, you can also receive a portion of the benefits while you’re alive. This depends on the type of policy you have and what events trigger the insurance payments like a critical illness.
The goal of life insurance is to give the policy holder peace of mind. For example, you know that when you die your family will have financial security. Although many policy terms and options are the same for many individuals, each specific life insurance rates depend on the applicant. For example, if you are young, in good health and of a certain gender, your premiums may be cheaper than another person’s premiums. Generally, insurance companies use statistics to determine your monthly rates. The statistics include age, gender and a healthy lifestyle. Thus, women usually have cheaper premiums than men because they live longer. So, you have to shop around to receive the best life insurance quotes.