Life Insurance

AAA

DEFINITION of 'Life Insurance'

A protection against the loss of income that would result if the insured passed away. The named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of the death of the insured.

INVESTOPEDIA EXPLAINS 'Life Insurance'

The goal of life insurance is to provide a measure of financial security for your family after you die. So, before purchasing a life insurance policy, you should consider your financial situation and the standard of living you want to maintain for your dependents or survivors. For example, who will be responsible for your funeral costs and final medical bills? Would your family have to relocate? Will there be adequate funds for future or ongoing expenses such as daycare, mortgage payments and college? It is prudent to re-evaluate your life insurance policies annually or when you experience a major life event like marriage, divorce, the birth or adoption of a child, or purchase of a major item such as a house or business.

VIDEO

RELATED TERMS
  1. Free Look Period

    A period where a new insurance policy owner is able to terminate ...
  2. Accumulation Option

    A policy feature of permanent life insurance that allows policyholders ...
  3. Equity-Indexed Universal Life Insurance

    A permanent life insurance policy that allows policyholders to ...
  4. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
  5. Second-To-Die Insurance

    A type of life insurance on two people (usually married) that ...
  6. Term Life Insurance

    A policy with a set duration limit on the coverage period. Once ...
Related Articles
  1. Can I Get Life Insurance?
    Insurance

    Can I Get Life Insurance?

  2. 5 Disastrous Financial Moves We Can't ...
    Budgeting

    5 Disastrous Financial Moves We Can't ...

  3. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  4. Preparing Finances For Deployment: A ...
    Personal Finance

    Preparing Finances For Deployment: A ...

comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
Trading Center