COVERAGE PURCHASED TO BENEFIT A LOVED ONE OR TO FULFILL A BUSINESS OBLIGATION
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum.
The advantage for the policy owner is "peace of mind", in knowing that the death of the insured person will not result in financial hardship for loved ones.
In other situation's life insurance can be used for buy sell agreements for businesses or to secure other business obligations.
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