Life insurance is unique among financial instruments. It is one of, if not the only financial instrument that is based on caring and love. Even though there can be personal advantages to having life insurance, the real impetus is love for those one cares most about.
There are various types of life insurance but they all have some common attributes. You pay an insurance company what are called premiums. At your death, the life insurance company pays an amount to the people you named in your policy, called beneficiaries. Also it’s interesting that if you named a beneficiary(ies) they’d receive the insurance amount free of income tax.
Some types of life insurance have cash benefits available while you are living. In these types, a portion of your premium goes into a cash reserve and builds on a tax deferred basis. You can access this money, called cash value. Some people use it to help with education costs, enhance retirement cash flow, or for any reason.
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