ADVANTAGES AND DISADVANTAGES OF LIFE INSURANCE

Advantages of Life Insurance
It provides an infusion of money for handling the adverse money consequences of the insured's death.
It enjoys favorable tax treatment unlike the other money instrument.
Death benefits ar usually income-tax-free to the beneficiary.
Death benefits might be estate-tax free if the policy is in hand properly.
Increase in cash value derease tax throughout the insured's period of time.
Cash worth withdrawals ar treated on a first-in-first-out (FIFO) basis, therefore money worth withdrawals up to the total premiums paid ar usually income-tax free.
Policy loans are financial gain tax free.
A life assurance policy could also be exhanged for an additional life insurance policy (or for an annuity) in the case wheren current taxation is not acqusition.
Note: All of the above statements ar usually true; but the tax advantages of life insurance have sure limitations that beneath the incorrect set of circumstances will cause the tax advantages mentioned to be lost. Please discuss with your insurance and tax advisor.
Many life insurance policies ar exceptionally versatile in terms of adjusting to the policyholder’s wants. The death benefit could also be bated at any time and also the premiums could also be simply reduced, skipped or increased.
A cash worth life insurance policy could also be thought of as a tax-favored repository of simply accessible funds if the necessity arises; however, the assets backing these funds are usually command in longer-term investments, thereby earning a higher return.
Disadvantages of Life Insurance..
Policyholders forego some current expenditure to pay policy premiums. Moreover, life insurance is usually purchased for the advantage of others and frequently only indirectly for the mortal.
Cash surrender values may be  lesser  than the premiums paid within the initial many policy years and generally a policyowner might not recover the premiums paid to the insurance if the policy is given.
The life assurance purchase decision and also the positioning of the life insurance is advanced particularly if the insurance is for estate coming up with, business things or advanced family condition.
The life insurance acquisition process itself is annoying and puzzling (e.g. Is the life assurance agent trustworthy? is that this the correct product and carrier? How will medical underwriting be streamlined?