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Life insurance policies are contracts between you and an insurance company which provide that, in exchange for premium payments, they will provide your beneficiaries with a death benefit upon your passing. It serves as a way of helping loved ones cover expenses such as outstanding debts, mortgage payments, funeral costs and child education costs that would otherwise arise following your death. Depending on the policy type – term life, whole life or universal policies may provide coverage options; coverage length varies.

Term life insurance is the most popular type, typically providing your beneficiaries with a lump sum payment upon your death, typically over an extended period of 10, 20, or 30 years. Premiums remain low during this period and do not increase with age; death benefits depend upon both age and health at purchase of policy which could change as you get older.

Permanent policies offer another form of coverage: they offer a lump sum payment upon your death; however, premiums typically increase with age. Some policies offer cash value access so you can access some of your policy’s funds while you are alive.

With universal life insurance policies, you have the flexibility to customize both death benefit and premium with riders. These enable you to add additional coverage without undergoing further underwriting, use some of your death benefit for chronic illness treatments and more – your life insurance agent can explain all available options to you.

Life insurers consider many factors when calculating the cost of life insurance, such as your age, sex, health and lifestyle that may fluctuate over time – such as whether or not you smoke cigarettes or have chronic medical conditions – when calculating premiums. They also calculate your likelihood of dying during the policy term known as your life expectancy probability.

everyday life insurance are the individuals or entities you appoint when purchasing life insurance policies. While changing these beneficiaries is possible by contacting the life insurance provider directly, doing so may have an effect on their death benefits.

Consider designating a trust as the beneficiary of your life insurance policy to allow its funds to benefit trusted family members while still giving you control over how they’re used. As with any important decision, always consult a lawyer first before making this choice.