Life insurance is a type of policy that guarantees a lump-sum payment or an annuity to designated beneficiaries in the event of the insured's death. Its primary purpose is to provide financial support to the insured’s loved ones, helping them cover unexpected expenses or compensate for the loss of income.

Types of Life Insurance:

1. Term Life Insurance: This policy is taken out for a specified period (e.g., 10, 15, 20 years). If the insured passes away within this period, the beneficiaries receive a payout. If the insured is still alive at the end of the term, there is no payout.

2. Whole Life Insurance: This type of insurance covers the insured for their entire life, regardless of when they pass away. The payout is therefore guaranteed for the beneficiaries.

Benefits of Life Insurance

• Financial Support for Loved Ones: It helps cover funeral expenses, debts, and regular living expenses.

• Protection for Children: It helps meet children’s educational or health needs.

• Preservation of Wealth: It enables a capital transfer to heirs without having to dip into family assets.

Life insurance is different from funeral insurance, which is specifically designed to cover funeral-related expenses.