⟰ TABLE OF CONTENTS
Basics of Life Insurance
| ⤹ What Is Life Insurance? | ⤹ How Life Insurance Works? | ⤹ How Much Life Insurance to Buy |
| ⤹ Types of Life Insurance? | ⤹ Qualifying for Life Insurance | ⤹ Additional Uses for Life Insurance? |
| ⤹ Who Should Buy Life Insurance? | ⤹ Life Insurance? | ⤹ Life Insurance? |
| ⤹ Life Insurance Riders? | ⤹ Life Insurance? | ⤹ Life Insurance? |
⟰ What Life Insurance is? Life insurance is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries when the insured dies. The insurance company promises a death benefit in exchange for premiums paid by the policyholder.
- Life insurance is a legally binding contract.
- For the contract to be enforceable, the life insurance application must accurately disclose the insured’s past and current health conditions and high-risk activities.
- For a life insurance policy to remain in force, the policyholder must pay a single premium up front or pay regular premiums over time.
- When the insured dies, the policy’s named beneficiaries will receive the policy’s face value, or death benefit.
- Term life insurance policies expire after a certain number of years. Permanent life insurance policies remain active until the insured dies, stops paying premiums, or surrenders the policy.
- A life insurance policy is only as good as the financial strength of the company that issues it. State guaranty funds may pay claims if the issuer can’t.