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Life insurance can be an essential financial tool, particularly for families with dependents such as children. It helps secure future needs such as college tuition or living expenses should something unexpected occur to you; but all the details can be confusing; to help make informed decisions about which policy best meets your needs, this article presents the fundamentals of life insurance. Life insurance provides its primary benefit in the form of a lump sum payment (known as a death benefit) which will be distributed upon an insured's death. This amount is usually determined at purchase time based on various factors including age, health status and occupation – typically, younger purchasers will pay less in premiums overall. There are various forms of life insurance policies, from whole to universal and variable universal life. While some policies offer coverage for specific timeframes (i.e. 10, 20, or 30 years), others provide permanent protection with some level of guarantee. Other options such as riders can help tailor policies specifically to individual needs – for instance disability coverage can often be added easily without further underwriting costs. If you own life insurance, it is vital to identify beneficiaries and contingent beneficiaries for when you pass away. Furthermore, assign a power of attorney so someone else may make decisions on your behalf regarding both life insurance and other assets. Life insurance policies typically involve three parties: the insurer, insured and beneficiary. An insurance company administers and enforces their policy according to state insurance departments' rules; sometimes both owners and insured are the same person – for instance if one spouse buys life insurance on another partner they would both become owners and insureds simultaneously. Your life insurance options include either single-premium policies that provide no cash value and expire at a predetermined date or whole life policies with guaranteed lifetime coverage. Depending on everdaylifeinsurance.com of policy chosen, loans or withdrawals may allow access to part of your cash value while dividends could help increase both coverage and cash value growth.