What Is Life Insurance? 
Life insurance is a contract between you -LRB- the insured person or policy owner -RRB- and an insurance company . The agreement is as follows : -- The insurance company will pay monetary funds to a family member of your choice when you die -- You will send the insurance company periodic payments before you die The purpose of life insurance is to provide money to your loved ones left behind in order to make final arrangements , replace your lost income , provide money for your child 's college education and pay off any outstanding debts such as a mortgage . Life insurance is a way to leverage smaller increments of your money in order to provide for your family once you 're gone . 