Life insurance is a contract between an individual and an insurance company in which the individual agrees to pay premiums in exchange for the insurance company's promise to pay a death benefit to the beneficiary upon the insured's death. Life insurance is designed to provide financial protection to the insured's loved ones in the event of their unexpected death.

There are several types of life insurance policies, including term life, whole life, and universal life. Term life insurance provides coverage for a specific period of time, such as 10, 20, or 30 years, and is typically the most affordable type of life insurance. Whole life insurance provides coverage for the entire life of the insured and also has an investment component. Universal life insurance is similar to whole life insurance but offers more flexibility in premium payments and death benefits.

The amount of life insurance needed varies depending on individual circumstances, such as income, debt, and the number of dependents. A general rule of thumb is to have coverage equal to 10-12 times one's annual income. However, it's important to work with a financial advisor or insurance agent to determine the appropriate coverage for one's specific situation.

When applying for life insurance, the applicant will typically undergo a medical exam and provide information about their health history and lifestyle. The insurance company will use this information to assess the applicant's risk and determine their premium rates.

In addition to providing financial protection to loved ones, life insurance can also be used for estate planning, business planning, and charitable giving. For example, a life insurance policy can be used to provide liquidity for an estate to pay estate taxes or to fund a buy-sell agreement for a business.

Overall, life insurance is an important component of a comprehensive financial plan and provides peace of mind knowing that loved ones will be taken care of in the event of the insured's death.