Life insurance is a contract between you and an insurer that promises to pay a designated beneficiary a specified sum upon your death. Life insurance provides security for loved ones left behind; for instance, it could help them meet financial obligations such as mortgage or tuition payments even without your contribution anymore.

Life insurance policies come in various varieties, ranging from term to whole life plans that can be customized to your unique requirements. Furthermore, you have access to numerous add-ons that further tailor the policy you select.

As everyday life insurance of a life insurance policy, you enter into an agreement with an insurer governed by state laws. A life insurance contract includes three parties - insurer, policyholder and beneficiaries. An insurer provides life insurance coverage while policyholder purchases it either alone or together with someone else; insured is defined as anyone whose death triggers payment of death benefits under this agreement and they could even be different than policyholder or beneficiary.

A premium is the amount you pay each year in order to keep your life insurance policy active, whether that be through regular payments or lump sum. Premiums tend to reflect an insurer's expected mortality rate for groups such as yours (for instance a 25-year-old nonsmoker male with a $100,000 policy will pay about $50 annually including administrative and sales expenses).

If you pass away, your beneficiaries are entitled to the death benefit in the form of a lump sum that they can use however you see fit - funeral costs, debt payments or retirement savings goals being among them. To make a claim quickly and efficiently with insurers you need proof of death in the form of certified copies of death certificate from insurer. Earlier you submit this evidence of loss the faster it can be processed!