The Process of Building Your Life Insurance

Life insurance is a financial product where you pay a regular premium to an insurance company, and in return, they provide a lump-sum payment, called a death benefit, to your designated beneficiaries when you pass away. It’s essentially a way to ensure that your loved ones or dependents—like a spouse, kids, or even a business—are financially protected after you’re gone.

There are two main types: term life insurance, which covers you for a specific period (say, 10 or 20 years) and pays out only if you die during that term, and permanent life insurance, like whole life or universal life, which lasts your entire life as long as premiums are paid and often includes a cash value component that grows over time. Term is usually cheaper and simpler, while permanent offers lifelong coverage and a savings element, but it’s pricier.

The idea is to replace your income, cover debts (like a mortgage), or fund future expenses (like kids’ education) so your family isn’t left in a financial bind. Some policies also let you access funds early for things like terminal illness, depending on the terms.