Life Insurance: A Deeper Look At It

One of the most essential types of insurance is life insurance. And there are a lot of definitions of life insurance out there that are inaccurate. So what is life insurance? Be sure to read the in-depth description of life insurance we’ll be including below.

So the gist of it is, upon your death, your beneficiaries will be given a certain amount of money by the insurance company. This is extremely helpful especially when you are the sole breadwinner of your family and their only source of money.

But wait. What are beneficiaries? What are all these seemingly complicated terms? First of all, these terms aren’t as complicated as you might think, and second, scroll down because we will be giving you a description of the features you might find in a life insurance policy. This is the guide when it comes to life insurance. Let’s dive right into it.


So, what is life insurance? Is it a way for you to be paid or given money? Life insurance isn’t anything like that. Say a relative of yours sadly passes away. And this relative has life insurance. What happens is, if you are a beneficiary of your relative’s life insurance, you’ll be given an amount of money you can use to either pay for the funeral or debts and loans.

Life insurance, however, is more than just being given money whenever a relative dies. There are certain features you should know about. And, there are two kinds of insurance you should explore before you get yourself some life insurance.


When you’re reading an insurance policy, you’re bound to come across some unfamiliar terms. Here are 5 you should know about so you can read your life insurance policy like a pro.

The Insurer

Those companies who provide you with life insurance are called insurers. The thing about life insurance is, not every insurance company provides this type. You need to find trustworthy companies that do.

The Policyholder

A policyholder is a person who owns the policy. Life insurance can either insure the holder which is the person who owns the policy or another person.

The Insured

The next term you’ll probably hear is “insured”. And this term is easy to understand. Because all it means is the person whose life is insured.

The Beneficiaries

Next up, we have the beneficiaries. We’ve mentioned this term before and a lot of you might have been confused so let’s clear things up. The beneficiary is the person who receives the death benefit or the money.

So, upon the death of the insured, the beneficiary is the person or group of people who will receive money from the insurance company. If it is a group of people, the money will be split evenly.

The Policy Length

Another important term to take note of is the policy length. The policy length is the time period the insurer agrees to pay the death benefit. This depends on the type of life insurance you have. The insurance could last for say 10 years or it could be permanent so long as you pay the fee.


Term Life Insurance

Let’s go back to the part where we said that there are two types of life insurance. The first type of life insurance is term life insurance. And this one provides coverage for a set period of time like 10 years. This one is cheaper than getting permanent life insurance but that does not make it better. The downside is that it does not build cash value.

Permanent Life Insurance

The other type is permanent life insurance. Permanent life insurance basically means you’re provided coverage your entire life. If you are the insured, as long as you’re alive and you pay your fee, you’ll be able to benefit from your life insurance. This might be more expensive than the first type but, your cash value does build up.


Getting life insurance will give you a lot of benefits. And it isn’t hard at all. All you need to do is figure out how much you can afford as well as which type of life insurance benefits you the most. Just make sure to partner with trustworthy companies and you’ll be just fine.