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Some say that life insurance is protection against
premature death. What it really is, is a bet between you
and the insurance company that you will not live as long
as they statistically think you will. If you die at a
younger age, they lose since you didn't have time to pay
them as much money as they had predicted that you would
do. If you live longer and therefore pay more monthly
payments, then they win. Very strange don't you think?
Some say that life insurance is a waste of money, that you
should just save and invest this money instead. Get real,
try walking into your bank and saying to the manager, "I
will put $50 into your bank every month. If for some crazy
reason I die tomorrow, will you pay my family $500,000?"
Yeah, sure, the bank will step up to the plate and fork over
the big bucks. But this is exactly what life insurance
companies do.
How much life insurance to carry will vary at different
times throughout your life. There are various forms of life
insurance. These are: Term Insurance, Whole Life Insurance,
Universal Life Insurance, Variable Life Insurance (Variable
Universal Life), and Single Premium Life Insurance. There
are other types of life insurance too. However, when closely
analyzed, they are just variations of the previously
mentioned types of life insurance policies. Whole Life,
Universal, Variable, and Single Premium Life Insurance, are
permanent insurance policies.
Although the cash value accumulated through an insurance
policy is taxable upon death, the actual policy death
benefit passes to the beneficiary with no taxes due
whatsoever.
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Reference Desk
