While you are alive, you are performing a variety of functions. Money for your support and the support of your family. Love and affection for your spouse and family along with a variety of parenting skills. Life insurance provides money for your family in the event you are not around to meet those responsibilities. Insurance serves another purpose. It provides you with some peace of mind-knowing that in the event of your death, your family will at least have the money needed to continue with the lifestyle that you were accustomed to .
A good insurance agent will sit down with you and help you decide how much insurance is right for you. It is easy in todays internet society to bypass the personal touch of an agent who actually gets to know you and something about your family. Don't do it. Talk to an agent personally and let them know about you and about your future hopes and goals.
You may run a business that would have trouble staying afloat without you to keep it going or you may have a special skill that your employer would have trouble doing without.
These situations illustrate the types of concerns that life insurance is designed to protect against. The insurance does not protect against death-it protects against losses that will be suffered in the event of your death.
The amount of money paid out by the insurance company is usually a fixed amount and not dependent upon your income at the time of your death.
A WikipediA article with more information can be found HERE.
Life insurance benefits may be payable to a designated individual. If no beneficiay is name, then payment is to the estate of the decedent and a persons Last Will and Testament will determine who gets the money. If there is no will then the money will go to family members as set forth in the laws of descent and distribution.
There a number of different types of life insurance. You may choose to have a "whole life" policy. This policy accumulates value over the years that you pay for it. It has a value of its own that may be paid even before the policy owner dies.
You may choose to purchase "term" insurance. This type of policy is generally less expensive and pays a specified amount on death. The policy does not accumulate value. You pay for the coverage that you purchase and when you stop paying, there is no accumulated value.