Life Insurance Model

So now we directly to the one of the most important insurance to consider. Yes, it is Life Insurance. Again in reviewing wikipedia:

Life insurance provides a benefit in monetary to a decedent's family or other designated beneficiary, and may specifically provide for income to an insured person's family, burial, funeral and other final expenses. Life insurance agreement often allow the option of having the proceeds paid to the beneficiary either in a cash payment or an annuity.

In many countries, such as in the US and in the UK, the tax law provides that the interest on the cash value is not taxable under certain circumstances. This leads to widespread use of life insurance as a tax-efficient method of saving as well as protection in the event of early death. They use to claim more money. This is kind of a insurance trick.


In the United State, tax on the interest income on life insurance policies and annuities which is generally deferred. However, in most cases the benefit derived from tax deferral may be offset by a low return. This is depends upon the quality of the insuring company, the type of policy and other variables (mortality, market return, etc.). Moreover on this, other income tax saving vehicles may be better alternatives for value accumulation.