Getting a life insurance is an essential requirement especially in the midst of chaotic lifestyles. The insurance thus provides financial support to deal with circumstances providing cover to the policyholder and their family.

Benefits of life insurance are many, which include -

• Death benefits to the beneficiary which are income-tax-free.
• Death benefits are generally estate-tax free if the policy is properly owned.
• During the policyholder's lifetime the cash values grow tax deferred.
• Where, cash value withdrawals are treated on a first-in-first-out (FIFO) basis. Hence, cash value withdrawals up to the total premiums which are paid are generally free from tax.
• Policy loans are exempt from tax too.
• The life insurance policy bought may be exchanged for another life insurance policy (or for an annuity) without incurring any current taxation on the exchange.

• Several of the life insurance policies are flexible in terms of adjusting to the needs of the beneficiary. For instance, in the policy the death benefit may be decreased at any time and its premiums may be reduced subsequently, increased or even skipped altogether.
• A cash value life insurance policy is actually thought of as a tax-favored repository of easy-to-access funds if the need may arise. Yet, the assets backing these funds are generally held in long-term investments, thereby letting one earn a higher return on investment.

Related Read: Quick Guide To How Much Life Insurance Do You Need?

Whereas, when you choose a life insurance policy the decision depends on -

• What you want the policy to cover?
• Who you want the policy for?
• Are there any other financial obligations which your income covers?
• Can the policy cover the future expenses, especially at a time when you won’t be working?