Life insurance is a means of providing funds for families if a breadwinner dies, and for paying bills and burial expenses of the deceased. Some policies also have a savings portion that provides emergency funds or income at retirement.
According to the American Council of Life Insurers (ACLI), in 2007, life insurance policies paid $58 billion to beneficiaries in the form of death benefits.
Even though people purchase life insurance for death protection, of all the universal life policies sold, only 12 percent resulted in death claims.
You can take cash value out of a life insurance policy and never pay taxes on the growth as long as you don't lapse or surrender the policy. Once you die, the money comes off the death benefit but the beneficiary receives the funds tax-free.
During the days of slavery, many life insurance companies made money selling life insurance on the lives of slaves.
The ACLI also reports that 65 percent of America families have some type of life coverage, totaling $19 trillion dollars.