Life insurance is a contract between a policyholder and an insurer where the company promises to pay a designated sum of money to beneficiaries upon the insured person’s death. Policies generally fall into two main categories: term life, which provides coverage for a specific period, and permanent life, which covers the insured for their entire lifetime and can build cash value. Its primary purpose is to provide financial security to loved ones by replacing lost income, covering funeral expenses, and settling outstanding debts.
In short: Think of Term as “renting” coverage for the years you need it most (like raising kids), while Whole is like “owning” a policy that includes an investment component.
Funeral expenses are a burden for the loved ones of someone who didn’t plan ahead.
