A contract with an insurance company in which the company generally agrees to pay a lump sum amount under certain circumstances in exchange for premiums paid by the insured party. The lump sum amount is known as a “death benefit”, and it is paid to beneficiaries if the insured dies during the period of the contract.
Typically, life insurance is chosen based on the needs and goals of the insured. Term life insurance generally provides protection for a set period of time, while permanent insurance, such as whole and universal life, provides lifetime coverage.
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