There are tax benefits associated with life insurance, whether you are the life insurance policy holder or not. These benefits usually come in the form of a tax deduction on the premiums paid, but they can also be in the form of a return of premium payments if death is due to an accidental cause.
If the life insurance policy is a traditional policy, a death benefit will be paid for that beneficiary. This amount is dependent on the duration of coverage and the amount of premiums paid. Traditional policies require that you make permanent payments to keep the policy in force. If you pay 10% per year, then after 20 years, the policy will have cost you $10,000.
When the insured person dies and there are no other beneficiaries under the policy, not only is the death benefit returned to you and any outstanding premiums refunded, but also any accumulated dividends are returned.
If the life insurance policy is a traditional policy, a death benefit will be paid for that beneficiary. This amount is dependent on the duration of coverage and the amount of premiums paid. Traditional policies require that you make permanent payments to keep the policy in force. If you pay 10% per year, then after 20 years, the policy will have cost you $10,000.
When the insured person dies and there are no other beneficiaries under the policy, not only is the death benefit returned to you and any outstanding premiums refunded, but also any accumulated dividends are returned.
