Life insurance protects the ones you have left behind if you are not there. If you die in an accident or due to another issue, then the life insurance will pay out money to your beneficiaries (loved ones), depending upon the amount set by your insurance policy. This financial support can help them to take care of their needs, which is essential if you have young children or other family members who depend upon your income.
You will pay a monthly or annual premium to the insurance company for coverage and this money will increase in cash value over the time period that you are paying premiums. You pay the premiums until you cancel the policy or you pass away.
The amount of coverage that you have will largely depend upon how much you want to pay per month. Policies are available in ranges of thousands of dollars to millions of dollars. The more the payout, the more the premiums will cost. In addition, your premium could be higher if you have lifestyle risks, such as smoking, advanced age, existing illness, and more. While life insurance will not cost very much when you are young, the later you start in life, the price will go up significantly.
Insurance policies can either be purchased for a lifetime or for a fixed period, such as contingent upon employment. A term or fixed period policy will cost you less, but it will also only payout if you pass away before the end of the policy. A lifetime policy will have higher premiums, but your money will accrue, which means that you can borrow against the cash value.