At its core, it’s a contract between you and an insurance company where you give them money, and if you were to die (knock on wood), they would give the set amount of money to whomever you choose.
The most important benefit is that you won’t be leaving your loved ones with a giant pile of debt and expenses. Think about it. Not only would they have to grieve your death, they’d also have to figure out how they’re going to pay for everything (past, present and future).
First of all, we should tell you that under the big ol’ umbrella of life insurance, you pretty much have two different flavors: perm and term.
With both varieties of life insurance, when your ticket gets punched, your chosen beneficiary receives the full death benefit to handle any debt and IOUs that may have been left behind.