Life Insurance

Coverage that pays designated beneficiaries when the insured person dies. It exists to make up the earnings the household loses, settle final expenses, and provide for anyone who was relying on that income.

Whether a person needs it follows straight from the definition: with nobody depending on their income, there is no lost income to replace.

Often confused with

Disability Insurance
Life insurance pays after death; disability insurance pays a living person who cannot work.

Taught in

See also

5.2.B.5