What is life insurance?
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Understanding life insurance
Life insurance is a contract with an insurance company that pays money to your loved ones when you die. You are eligible for this payment as long as you die during the lifetime of the contract and as long as you have paid the monthly or annual premiums.
Life insurance is paid in one full lump sum, meaning the full death benefit will be paid all at once and it will be tax-free. This gives your family the option to use the money however they want to. As loved ones no longer have the support of your income, they may need this money to pay off debts like a mortgage or use it to continue making rent payments. And in many cases, people use life insurance to care for children, fund educational expenses, and cover day-to-day living costs.