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..
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Insurance is an agreement where you pay you the insurer a little money called a premium in case something bad happens to you. If the bad thing does happen then the insurer will pay you a lot of money as compensation. Sometimes the premium is paid upfront at the start, sometimes it is paid regularly like once a month. An insurer has two sources of income: premiums and the interest on investments it makes using the premiums. It has two sources of expenditure: compensation payouts and running costs. The insurer hopes the bad thing is unlikely to happen, so that it collects premiums from lots of people and pays compensation to only a few.
In life insurance the bad thing is you die. The compensation goes to someone close to you, typically your spouse. Sometimes the agreement is for a fixed time — maybe the term of your house mortgage, so if you die your spouse isn’t homeless. Sometimes the agreement ends when you die — called whole-life insurance. In whole-life insurance you might think the insurer has a bad deal since they will definitely have to pay out eventually. The way they respond to that is (1) premiums are higher than for fixed-term insurance and (2) the average whole-life policy runs for decades, so it earns a lot of interest.
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