Life insurance is a contract in which a policyholder pays regular premiums in exchange for a lump-sum death benefit paid to the policyholder's beneficiaries. The lump-sum benefit is paid when the policyholder either passes away or a specific amount of time has passed. Life insurance policies can provide financial security for surviving family members by replacing lost income and covering expenses.

There are a number of different types of life insurance policies (sometimes referred to as products)—all of which generally fall under the categories of term life insurance and whole life insurance. The names and terms of different life insurance products in these two categories vary from one insurance company to another.

Some examples of life insurance products include:

• term life insurance

• whole life insurance

• universal life insurance

• indexed universal life insurance

• guaranteed universal life insurance

• variable life insurance

• variable universal life insurance

• hybrid life insurance with long term care

• group life insurance

• mortgage life insurance

• credit life insurance

• joint life insurance

• simplified issue life insurance

• guaranteed issue life insurance

• accidental death and dismemberment insurance

In Alabama, life insurance is regulated under Title 27 of the Alabama Code, which establishes the legal framework for life insurance contracts and the requirements for life insurers operating in the state. Life insurance policies are agreements where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person or after a set period. The policyholder typically pays premiums in exchange for this benefit. The types of life insurance available include term life, which provides coverage for a specific term; whole life, offering coverage for the insured's lifetime with a savings component; and various forms of universal life insurance, which combine a death benefit with a savings account and may offer more flexibility in premiums and benefits. Other products like variable life and variable universal life involve investment components, while specialized forms like mortgage life insurance are designed to pay off a mortgage upon the policyholder's death. Alabama law requires that life insurance policies meet certain standards to ensure they are fair and financially sound, and insurers must be licensed by the Alabama Department of Insurance. Consumers are advised to thoroughly understand the terms and conditions of any life insurance policy and consider consulting with an attorney or financial advisor to ensure the product meets their needs.