Life can be unpredictable but your family's future doesn't have to be.
That's the importance of life insurance. It's one of the smartest ways to make sure your loved ones are financially protected even when you're no longer around.

In this guide, we'll walk you through everything you need to know about life insurance in simple, plain English. Let's dive in!

What Is Life Insurance?

Life insurance is a contract between you and an insurance company.
You pay regular payments (called premiums), and in return, the insurance company promises to pay a lump sum of money (death benefit) to your chosen person (beneficiary) if you pass away while the policy is active.

What Is the Purpose of Life Insurance?

Life insurance isn’t just about dying. It's about protecting the people you care about most.
Here’s what it can help with:

• Income replacement: Helps your family pay bills and maintain their lifestyle without your paycheck.
  
  
• Funeral expenses: Covers costly funeral and burial expenses.
  
  
• Paying off debts: Helps settle mortgages, car loans, credit cards, and personal debts.
  
  
• Leaving a legacy: You can leave money for your kids' education, charity donations, or gifts to loved ones.

Also read: How Life Insurance Works

Key Takeaways

• Life insurance is financial protection for your loved ones after you're gone.
  
  
• It helps cover living expenses, debts, final costs, and future needs.
  
  
• Choosing the right policy depends on your personal and financial situation.

How Life Insurance Works

Life insurance sounds complicated, but it’s actually pretty simple once you break it down.

Policyholder and Beneficiary

• Policyholder: The person who owns and pays for the insurance policy.
  
  
• Beneficiary: The person or people who receive the death benefit when the policyholder dies.
  
  

Premiums

• The monthly or yearly payments you make to keep your policy active.
  
  
• Premium amounts depend on things like your age, health, lifestyle, and the amount of coverage you choose.
  
  

Death Benefit

• The money paid to your beneficiary when you pass away.
  
  
• It’s typically tax-free and can be used however your beneficiary chooses.
  
  

Claims Process

• After your passing, your beneficiary files a claim with the insurance company.
  
  
• Once approved, the insurance company pays out the agreed amount.

Check out: Life Insurance 101

Types of Life Insurance

There’s no "one-size-fits-all" life insurance.
Here’s a quick guide to the most common types:

Term Life Insurance

• Coverage for a set period (like 10, 20, or 30 years).
  
  
• Cheapest option.
  
  
• Good if you want coverage during key years like raising kids or paying a mortgage.
  
  

Permanent Life Insurance

• Covers you for life as long as you pay the premiums.
  
  
• Also builds cash value over time.
  
  

Whole Life Insurance

• Fixed premiums and guaranteed death benefit.
  
  
• Cash value grows at a guaranteed rate.
  
  

Universal Life Insurance (UL)

• Flexible premiums and death benefits.
  
  
• Cash value growth based on market interest rates.
  
  

Variable Life Insurance

• Lets you invest cash value in stocks and bonds.
  
  
• Potential for bigger growth, but comes with more risk.
  
  

Variable Universal Life Insurance (VUL)

• Combines flexible premiums with investment options.
  
  

Indexed Universal Life Insurance (IUL)

• Cash value growth tied to a stock market index (like the S&P 500).
  
  
• Safer growth with less risk than VUL.
  
  

Final Expense Insurance

• Smaller policy meant to cover funeral and burial costs.
  
  
• Easier approval process.
  
  

Simplified Issue Life Insurance

• No medical exam required — just answer health questions.
  
  
• Fast approval.
  
  

Guaranteed Issue Life Insurance

• No health questions or exams.
  
  
• Guaranteed approval, but higher premiums.
  
  

Common Life Insurance Riders

Riders are add-ons you can buy to customize your policy.

• Accidental Death Benefit Rider: Pays extra if you die in an accident.
  
  
• Waiver of Premium Rider: Waives your premiums if you become disabled.
  
  
• Long-Term Care Rider: Helps cover nursing home or home care costs.
  
  
• Guaranteed Insurability Rider: Lets you buy more coverage later without another medical exam.
  
  
• Child Term Rider: Covers your children under your policy.
  
  
• Return of Premium Rider: Refunds your premiums if you outlive the policy term.
  
  
• Chronic Illness Rider: Lets you access part of your death benefit early if you’re diagnosed with a serious illness.

How to Buy Life Insurance

Buying life insurance doesn’t have to be overwhelming if you take it one step at a time.

Step 1: Assess Your Financial Needs

Think about what you want your policy to cover:

• Income replacement: How many years of your income would your family need?
  
  
• Debts and liabilities: Mortgage, car loans, credit cards, and personal loans.
  
  
• Future expenses: College tuition for kids, weddings, etc.
  
  
• Final expenses: Funeral, burial, medical bills.
  
  

Step 2: Choose the Right Type of Policy

Pick between term or permanent based on your needs and budget.

Step 3: Compare Quotes

Every company prices policies differently that’s why it’s smart to shop around.

(Need help? Majdas Touch Insurance can walk you through options that make sense for YOU.)

Step 4: Apply and Undergo Underwriting

Depending on the policy, you may have to:

• Answer health questions.
  
  
• Take a medical exam.
  
  
• Authorize access to medical records.
  
  

Step 5: Name Your Beneficiary

Choose the person (or people) you want the death benefit to go to.

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FAQ About Life Insurance

1. Do I really need life insurance?

If someone depends on your income, spouse, kids, parents — you need life insurance. Even if you’re single, it can cover funeral costs or leave a legacy gift.

2. How much life insurance do I need?

A good rule of thumb is 10-15 times your annual income, but it depends on your debts, lifestyle, and future plans.

Need help figuring it out? Contact Majda’s Touch Insurance at info@majdastouchinsurance.com we'll do the math for you.

3. Is life insurance expensive?

It can be surprisingly affordable, especially if you buy it when you're young and healthy. Term life insurance policies can start at just a few dollars a week.

4. Can I get life insurance without a medical exam?

Yes! Options like simplified issue or guaranteed issue policies don’t require a medical exam.

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Why Choose Majda’s Touch Insurance?

• Personalized guidance tailored to your life goals.
  
  
• Clear, simple explanations — no confusing insurance jargon.
  
  
• Access to top-rated insurance companies for the best rates.
  
  
• Fast, friendly support every step of the way.
  
  

Protect what matters most.

Reach out to Majda’s Touch Insurance today!