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In a world full of uncertainties, one thing is certain—we all want to ensure the well-being of our loved ones, even when we’re no longer around. That’s where life insurance comes in. It’s not just a financial product—it’s a promise of protection, a tool for planning, and often, a legacy for the future.

What Is Life Insurance?

Life insurance is a contract between a policyholder and an insurance company. In exchange for regular payments called premiums, the insurance company agrees to pay a lump sum—known as a death benefit—to the policyholder’s beneficiaries upon their death.

The main purpose of life insurance is to provide financial support to dependents or other chosen beneficiaries after the policyholder passes away. This money can be used for a variety of needs: covering funeral costs, paying off debts, replacing lost income, funding education, or simply maintaining a family’s lifestyle.

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Types of Life Insurance

There are several types of life insurance, each designed to suit different financial goals and life stages:

1. Term Life Insurance

• Coverage: Fixed term (e.g., 10, 20, or 30 years)
• Premiums: Generally lower
• Payout: Only if the policyholder dies within the term
• Best for: Those seeking affordable protection during key years (e.g., while raising children or paying a mortgage)

2. Whole Life Insurance

• Coverage: Lifetime
• Premiums: Higher but fixed
• Cash Value: Builds over time, can be borrowed against
• Best for: Long-term planning, estate protection, or those wanting a savings component

3. Universal Life Insurance

• Coverage: Lifetime (flexible)
• Premiums: Adjustable
• Cash Value: Grows based on interest rates
• Best for: People who want flexible premiums and savings growth

4. Variable Life Insurance

• Coverage: Lifetime
• Cash Value: Invested in stocks, bonds, or mutual funds