What is Life Insurance?

[**Life insurance**](https://datesfinserv.com/fd-vs-life-insurance/) is a contract between you and an insurance company. In exchange for regular payments (premiums), the insurer promises to pay a lump sum (death benefit) to your beneficiaries in the event of your death during the policy term. **Key Features of Life Insurance:** * **Financial Protection:** The primary purpose is to provide financial security to your family or dependents in case of your untimely demise. * **Risk Coverage:** It mitigates the financial risk associated with loss of income due to death. * **Different Policy Types:** Various types of life insurance are available, including term life insurance (pure protection), whole life insurance (protection plus savings), and unit-linked insurance plans (ULIPs, which combine insurance with investment). * **Tax Benefits:** Premiums paid for life insurance are eligible for tax deductions under Section 80C of the Income Tax Act (in India).