How Does Life Insurance Work? 
Health insurance pays when someone is sick . Property insurance pays when there is damage to property . Life insurance pays when someone dies . It starts when people decide to get life insurance on themselves , or on others who have financial ties to them . They apply for coverage , comply with underwriting requirements -LRB- which may or may not include taking a free physical exam -RRB- , and then are issued policies . These policies include beneficiaries designated by the owners of the policies . When the insured persons in the policies pass away , their beneficiaries receive the amount of life insurance that was purchased by those policies . Of course , there are different types of life insurance that can provide cash value , additional benefits , etc. . But in a nutshell , that is how life insurance works . 