A life insurance policy is a contract between an individual (the policyholder) and an insurance company, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. This financial protection helps beneficiaries cover various expenses, such as funeral costs, debts, and living expenses.�

There are several types of life insurance policies:

1. Term Life Insurance: Provides coverage for a specified period (e.g., 10, 20, 30 years). It is generally more affordable and straightforward, offering a death benefit without any cash value component.

2. Whole Life Insurance: Offers lifetime coverage with a death benefit and a savings component (cash value) that grows over time. Premiums are typically higher, but it combines insurance with investment.

3. Universal Life Insurance: Similar to whole life but offers more flexibility in premium payments and death benefits. The cash value earns interest based on market rates.

4. Variable Life Insurance: Includes a death benefit and a cash value that can be invested in various accounts, such as stocks and bonds. The value fluctuates based on the performance of these investments.

5. Simplified Issue Life Insurance: Requires no medical exam, only a health questionnaire. It's faster to obtain but often comes with higher premiums and lower coverage amounts.

6. Guaranteed Issue Life Insurance: Requires no medical exam or health questions, guaranteeing acceptance. Premiums are high, and coverage amounts are usually limited, making it suitable for those with serious health conditions.

When selecting a policy, consider your financial goals, budget, and the needs of your beneficiaries. Consulting with a financial advisor can help tailor the best policy for your situation.