What type of insurance allows policyholders to designate beneficiaries in case of death?

Life insurance is designed specifically to provide financial protection to beneficiaries upon the death of the insured individual. When a policyholder purchases a life insurance policy, they have the option to designate beneficiaries, which can include family members, dependents, or trusts. This ensures that the designated individuals receive a death benefit, providing them with financial support during a difficult time.

Term insurance, while a type of life insurance, is focused on providing coverage for a specific period and allows for beneficiary designation but is a subset of life insurance overall. Group insurance typically provides coverage for multiple individuals under a single policy, commonly offered by employers, but the beneficiary designation aspect is dependent on the specific terms of the group plan. Accidental death insurance specifically covers death resulting from accidents and can also allow for beneficiary designation, but it is not as comprehensive as life insurance, which covers a broader range of death scenarios, including illness and natural causes.

Thus, life insurance is the overarching category that directly addresses the ability to designate beneficiaries in the event of death.