Life insurance is a contract between an individual and an insurance company in which the insurance company agrees to pay a lump sum of money to the individual's designated beneficiary or beneficiaries upon the insured's death. The insured individual pays premiums to the insurance company, and in return, the insurance company promises to pay out a death benefit to the beneficiary or beneficiaries if the insured dies while the policy is in effect.

There are two main types of life insurance: term life insurance and permanent life insurance.

Term life insurance provides coverage for a specified period of time, such as 10, 20, or 30 years. If the insured dies during the term, the death benefit is paid out to the beneficiary. If the insured survives the term, the policy expires and no death benefit is paid out.

Permanent life insurance, on the other hand, provides coverage for the insured's entire lifetime. This type of policy includes a death benefit as well as a cash value component, which accumulates over time and can be borrowed against or withdrawn by the policyholder.

Life insurance is typically purchased to provide financial protection for loved ones in the event of the insured's death. It can help cover expenses such as funeral costs, mortgage payments, and living expenses, and can provide peace of mind for both the insured and their loved ones.