When you purchase a life insurance policy, you’re signing a contract with your insurer that you will pay your insurance premiums. When you pass away, it’s your insurance provider’s job to pay your beneficiaries—the people who receive the payout from your life insurance policy, such as your partner and children.

Once you’ve purchased your policy (and chosen your beneficiaries), you might be able to choose whether your loved ones receive monthly payments or larger annual payments, depending on your insurance options and selected policy.

Life insurance helps cover your beneficiaries’ financial needs after you pass away. Your policy’s payout can be used to pay for expenses like:

• Mortgage payments
• Daily living expenses
• Auto loans
• Medical bills not covered by health insurance
• End-of-life expenses and funeral costs
• Education expenses
• Family business

Yes, you can have multiple life insurance policies. You might have a group life insurance plan through your employer, for example, as well as a policy that you bought on your own. Or, you might buy a general life insurance policy to cover your family’s living expenses and a burial policy to cover your own funeral costs.

Stacking multiple policies can give you flexibility and extra coverage that helps you meet your goals at various life stages.

There are benefits to buying life insurance as early as possible. If you purchase a policy when you’re young and healthy, it’s typically a lower premium cost.

When you experience a major life event—marriage, the birth of a child, or divorce—it’s important to review your policy and make any necessary changes to your beneficiaries. When you have a child, for instance, you may want to increase your death benefit to help your partner cover child-related costs, including future education expenses.

After age 60, life insurance admittedly tends to get more expensive. However, buying final expense life insurance can be helpful to cover end-of-life expenses such as funeral costs.