Life insurance is a contract between an individual and an insurance company. In exchange for regular payments of premiums, the insurance company provides a lump-sum payment, known as a death benefit, to the designated beneficiaries upon the insured person's death. The purpose of life insurance is to provide financial security for one's loved ones in the event of the policyholder's unexpected death. It can help cover expenses such as funeral costs, outstanding debts, and living expenses for surviving family members.

There are different types of life insurance policies, such as term life insurance, whole life insurance, and universal life insurance, each with their own unique features and benefits. Term life insurance provides coverage for a specified period, typically 10-30 years, and pays out the death benefit only if the policyholder dies during that term. Whole life insurance, on the other hand, provides lifelong coverage and also has a cash value component that can accumulate over time. Universal life insurance is similar to whole life insurance, but offers more flexibility in terms of premium payments and death benefits.

Life insurance can be an important part of a comprehensive financial plan, particularly for those with dependents or outstanding financial obligations.
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