They say that when you’re a hammer, all the world’s a nail. It seems like life insurance salespeople will try to sell you life insurance as a solution to almost any problem you may have. We’ll give you a bit of a quick primer on some of the various ways life insurance is used.

Life Insurance as Insurance
The classical use of life insurance has always been to insure a family against the death of a breadwinner. This is still one of the most common uses of term and whole life insurance.

Life Insurance as a Saving Device
Another way life insurance is used is as a savings account – in addition to the death benefits, Whole and Universal Life insurance have cash values that can grow as assets are paid in and the policyholder ages.

Life Insurance as an Income Device
Life insurance companies also issue annuities – sort of like reverse life insurance – where the policyholder pays a large up front payment, and receives a stream of payments for the rest of their life in return.

Life Insurance for Estate Planning
Life insurance policies pay out to the beneficiaries on the policyholder’s death and is generally not included in the value of the policyholder’s estate. Because of that, insurance can be a useful tool for estate planning.

These are a few of the main ways that life insurance is used for individuals, and there are others. However, in every instance, insurance policies are complex and sophisticated legal contracts, and they may not be right for you. You should definitely consult with an independent advisor before to make sure you understand what you’re buying.