Life Insurance

Summary

This practice note provides an introduction to life insurance. There are a variety of life insurance products but all are intended to provide a death benefit to the heirs or others designated by the insured as the beneficiaries of the policy. Death benefit refers to the payment by a life insurance company of the dollar proceeds of the insurance policy if it is in force at the time of the insured's death. For the proceeds to be payable, the insured's death must have been from a cause not excluded by the policy and the insured must die while the policy is in force. The death benefit will be shown on the declarations of the insurance policy. Although most life insurance policies are purchased and maintained to offset the financial loss to a family from the death of the insured, such as a parent or spouse, life insurance can also be used as a tool in business transactions and in estate planning. The use of it in those contexts does not alter its nature as providing financial benefits when ...