eli5: What exactly is life insurance? How does it work?

Question

Is it as simple as person x gives money to some company to be spent a certain way after person x dies? How is that any different from a will? etc..

In: 0

Answer 1

It’s death insurance.
When you die, your beneficiary gets x number of dollars.
That can be used to clear debts, burial expenses or whatever you and your beneficiary have discussed.