Help protect your family’s future. Enter your zip code to get your free quote today!

Get Your Free Quote

How Does Life Insurance Work?

A life insurance policy is a contract between you and a life insurance company that provides certain financial benefits in the event of your death. Aside from certain exceptions, if you die while your policy is in force, your insurer will pay out a death benefit to your beneficiaries.

The main goal of life insurance is to provide financial support to your beneficiaries when you die. You may have a need for life insurance if:

  • You’re married
  • You have children who depend on your income
  • You care for another person
  • You hold a large amount of debt
  • You’re looking to plan your estate
  • You want to diversify your investments (in the case of permanent life insurance)

Types of Life Insurance

The main types of life insurance are term life insurance and permanent life insurance.

Term Life Insurance

With term life insurance, you secure a policy that remains in force for a set amount of time (typically between five and 30 years).

Term policies enable you to secure coverage during crucial times in your life, such as when you're building a family, starting a business or caring for elderly parents. Term life insurance is often more affordable than permanent life insurance, especially if you only need coverage for this set period of time.

Many term life policies require you to pass a medical exam and answer a series of medical questions. An insurance company may take into consideration your age, medical history and current health and lifestyle when deciding whether or not to sell you a policy. These factors can raise your premiums if the company decides to offer you a policy.

Permanent Life Insurance

Permanent life insurance remains in effect for as long as you continue paying your premiums. Unlike term life insurance, it doesn't expire after a set amount of time. Permanent policies also build cash value over time.

Choosing a Policy

Finding the right life insurance policy for you will depend on numerous factors. A licensed agent can help match you with a policy that makes sense for your needs. 

To learn more about your life insurance options, speak with a licensed agent at 1-800-966-7169 or read through our guides below.

*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.

Help protect your family’s future. Enter your zip code to get your free quote today!

Get Your Free Quote

Related Information

How Much Does a Life Insurance Policy Payout After Death?

If you have a life insurance policy, a payout of the death benefit is preceded by a claim providing a death certificate.

Read More

How Does Term Life Insurance Work?

Find out how term life insurance works and get more information on the different types of term life policies that are available.

Read More

Discovering How Whole Life Insurance Does Work

Whole life insurance is a type of permanent life insurance policy that accumulates cash value over time.

Read More

Term vs. Whole Life Insurance

Term and whole life insurance are two of the most popular kinds of life insurance policies. Read on to learn how they work.

Read More

How Does Guaranteed Life Insurance Work?

Even if you’re a senior and don’t qualify for most life insurance policies, you can likely still get coverage with a guaranteed-issue life insurance plan.

Read More

Is There a Time When Life Insurance Expires?

Is it possible that your life insurance policy may expire before you die? And what happens if it does?

Read More

When is Life Insurance Taxable? | What You Need to Know

Wondering if a life insurance policy can be subject to taxes? Usually it isn't, but there are a few exceptions.

Read More

How to Decide Whether You Need Supplemental Life Insurance

Is your employer’s life insurance coverage enough for you and your family? If not, here’s why you should consider a supplemental life insurance policy.

Read More

Life Insurance Payout Process

Once a claim has been filed, it generally takes life insurance carriers a couple of weeks to make the payout to a beneficiary.

Read More