All life insurance policies have one thing in common – they’re designed to pay money to “named beneficiaries” when you die. The beneficiaries can be one or more individuals or even an organization. In most cases, policies are purchased by the person whose life is insured. However, life insurance policies can be taken out by spouses or anyone who is able to prove they have an insurable interest in the person. If you buy insurance on someone else’s life (a spouse, for example), the policy pays when that person dies.
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