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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Life insurance is like any other insurance policy. You pay premiums with the understanding that when you die, the named beneficiary on the policy will get a payout. The money can be spent however the beneficiary chooses but it’s not uncommon for at least some of it to be used to settle debts the deceased left behind like unpaid credit cards, mortgages, etc.
A will is a legal document you create before you die that states who gets your belongings, money and other articles of your estate after your death. They may stipulate who gets what and how much goes to each party named in the will. They might also have conditions about how assets are distributed like waiting until children reach adulthood before getting their inheritance.
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