Life Insurance is a system where a company provides a policy to a covered person. When that person dies, the company pays the policy amount, tax-free, to a beneficiary. Life insurance is an old tried and true system for a family to protect itself financially, generation to generation. Life insurance can be set up to provide for young children in the event of the death of a parent or grandparent, or to cover specific debts, such as a mortgage or college tuition. There are term life insurance plans that guarantee a payout if the covered person dies within a specified time period, and there are whole-life life insurance policies that will payout no matter when the covered person dies.
Life insurance companies have developed many options a person can add to their policy. These include “return of premium” that pays back all premiums paid in if the covered person outlives their term coverage. There is double-indemnity that pays out twice the policy amount in the event of accidental death. And there are many more. It is easy to find a policy that will fit your specific needs.