What Is Life Insurance And How Does It Work
In exchange the company pays a death benefit to your.
What is life insurance and how does it work. Each life insurance policy is different and each state s laws regulating insurance policies are different. In general most insurance policies identify the following. Life insurance can be confusing so let s start to understand it in simple words.
Life insurance in simple terms. A life insurance policy is an agreement between an insurance company and a person or legal entity. Life insurance is a contract between you and an insurance company.
With permanent life insurance instead of paying premiums for a set number of years you pay them for your whole life and when you die your beneficiaries receive a death benefit. It is a contract between an insured and the insurer. Life insurance is a contract between you and an insurance company.
If you re still alive at the end of the term your policy ends. You make regular premium payments to the life insurance company. If the policy is in force at the time of death your beneficiary receives the death benefit chosen when the policy was purchased.
As part of the agreement the policyholder pays the insurance premiums. Policies are purchased for a specific period of time commonly for 10 20 or 30 years.
