by Understanding Life Insurance and Its Purp
Life insurance is a contract between an individual and an insurer, where the insurer provides
financial compensation to beneficiaries in the event of the policyholder’s death. The main
objective is to provide financial security to dependents, ensuring that they are not burdened
with debts or a loss of income when the insured passes away.
Types of Life Insurance Policies
There are several types of life insurance policies, including term life, whole life, and universal
life insurance. Term life offers coverage for a specific period, while whole and universal life
offer lifelong coverage. Understanding which policy suits your financial goals is essential in
choosing the right insurance plan.
How Life Insurance Supports Long-Term Financial Goals
Life insurance can be part of a broader financial plan, serving as a tool for wealth
preservation and estate planning. Many policies accumulate a cash value over time, allowing
policyholders to borrow against the plan or use it as an investment vehicle, depending on the
policy type.
Choosing the Right Life Insurance Policy
Selecting a life insurance policy depends on various factors, including age, income, debts,
and dependents. It’s crucial to assess your financial situation and long-term goals to select a
policy that provides adequate coverage and peace of mind.
