What is Life Insurance?

Life insurance is a contract between you and an insurance company. As with other insurance products, life insurance is designed to manage risk. In this case, offering financial security to your loved ones. 

Life insurance policies consist of four basic components:

  • Policyholder. Owner of the life insurance policy and who also pays premiums. The applicant and policyholder are usually the same people, but you’re allowed to purchase a policy on others’ behalf.
  • Beneficiary. In the event of the death of the policyholder, the individual(s) or business entity(ies) who will receive the death benefit. When you purchase a policy, you can name one (or more) persons as beneficiaries.
  • Premium. Monthly or yearly payments that are paid to maintain an active policy (or to keep it “in-force”). Upon your death, a premium ensures your beneficiaries will receive the outlined benefit from the insurance company. The policy lapses if you stop paying premiums.
  • Death benefit. In the event of the insured’s death, the insurer will pay out the death benefit. Beneficiaries of death benefits are generally paid a lump-sum amount and are not taxed.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More