Life Insurance Legal Meaning and Definition

Here is a simplified definition of the legal term Life Insurance.

Life Insurance (noun)

A legal agreement involving two parties: a person (known as the policyholder) and an insurance company. The policyholder makes regular payments, known as premiums, to the insurance company. In return, the company promises to pay a specific sum of money, often referred to as a death benefit, to someone (usually a designated beneficiary such as a family member) when the policyholder dies. The purpose is to provide financial protection for the policyholder's dependents after their death.