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Life insurance policies are agreements between you and an insurer that pay out a lump sum amount upon death to your beneficiaries, depending on their type. Life insurance can provide cash value or other benefits depending on its type and can help cover funeral costs, debt payments or living costs after you pass away – so make sure you consider all aspects of your family when making this important decision.

Life insurance comes in many different varieties, each offering unique benefits. While some policies only provide death benefits, others provide coverage over a specific time or lifetime period or even allow you to borrow against it as an income source during life. As many policies offer more flexible plans to suit individual budgets and lifestyles.

Life insurance companies must pay out death benefits within two months of receiving proof of your death and verifying your beneficiary. Most policies include a contestable period that allows them to deny your claim if they suspect misrepresentations on your application form; typically this contestable period lasts no more than two years, although certain states also include an optional one-year suicide clause.

Most people opt to name their spouse, children, or other loved ones as primary beneficiaries, although you could also set up a trust to ensure your money goes where you intend. It’s wise to review and update beneficiary selections as your life changes such as marriage or divorce or having children.

Some types of life insurance offer both death benefits and savings that you can tap while still alive. Whole and universal life policies, for instance, allow policy holders to withdraw part of their cash value or take out loans against it; however, such withdrawals will reduce both your death benefit and overall coverage amount.

Term life insurance is often the easiest form of life insurance to comprehend. everdaylifeinsurance.com provides a set death benefit and level policy face amounts over an agreed-upon contract period (e.g. 10-20-30 years). Over this timeframe, regular premium payments will be required from you. If you don’t die during the contract term, your death benefit and premium payments will cease. Some term policies can be renewed at the end of their terms with new premiums increasing every year. Some term life policies can be converted to permanent policies with medical underwriting and additional cost involved. You can purchase individual life insurance through an agent, broker, phone call or even the internet. Group life insurance policies may also be obtained through your employer or professional organization, although approval times vary by provider – some use “accelerated underwriting” which omits medical exams and approves applicants in days or weeks, while other insurers require traditional processes with medical exams and approval usually takes several months.