What happens when you die?

No, no, we're not talking religion here. We're talking cold hard cash.

If you make money for your family, you're going to want to be sure they're taken care of if you die. Yes, they will have bigger issues to deal with—namely, unending grief—but imagine how much harder those issue would be if they also had to be stressing over money.

The basic idea of life insurance is that you pay some amount each month, and then when you die, the life insurance company pays your family. Depending on the policy, the cash from the insurance company will be enough to cover everything from funeral costs to years of survival without the money-maker.

There are two flavors of life insurance:

• Term life insurance. With term life insurance, you pay a certain amount every month, and when you die, your family gets some dough. Term life insurance usually lasts for a specific amount of time—like 20 or 30 years, for example—and the amount you pay stays the same the entire time. Once the insurance runs out, all the money you paid is gone, and you'll need to find a new policy. But if you die during that "term" (those 20 or 30 years), your family gets the payout.
• Whole life insurance. Whole life insurance is more expensive, but it's seen as more of an investment, too. You're able to borrow against it and even take money out of the policy; and unlike term life insurance, whole life insurance protects you until you pass away.
• Universal life insurance. This type is exactly like whole life insurance, with one major difference: you can change the amount you pay every month.

How much you pay for life insurance will depend on how old you are and how healthy you are. Insurance companies are hoping you outlive your policy, so if they think you might not (because you're old or unhealthy), they're likely to up your monthly cost.

Who knew death was so complicated?