Life insurance is a contract between an insurance policyholder and an insurer, wherein the insurer agrees to pay a designated beneficiary a sum of money upon the death of the insured person, in exchange for regular premium payments. This financial product provides security for loved ones, ensuring they receive financial support during difficult times.

Life insurance is essential for anyone with financial dependents, as it acts as a safety net that helps cover expenses such as loans, childcare, and education in the event of the policyholder's death. By securing life insurance, you ensure that your loved ones are financially protected and can maintain their standard of living even after your passing.

There are primarily two categories of life insurance: term life insurance, which provides coverage for a specific period and pays benefits only if the insured dies within that term, and permanent life insurance, which offers lifelong coverage and may include an investment component that builds cash value over time. Common types of permanent life insurance include whole life, universal life, and variable life policies.

The amount of life insurance coverage you need depends on various factors such as your financial obligations, dependents' needs, and future expenses like education or mortgage payments. A common guideline is to have coverage that is 10 to 15 times your annual income to ensure adequate financial support for your loved ones.