Life Insurance: Meaning and Importance
At its core, life insurance is a contract between an individual (the policyholder) and an insurance company. The policyholder pays regular premiums to the insurer in exchange for a promise that the insurer will pay a specified sum of money (the death benefit) to the policyholder’s beneficiaries upon their death. The death benefit is intended to help cover expenses such as funeral costs, outstanding debts, and ongoing living expenses for the surviving family members.