Currently, there are two major benefits associated with life insurance policies. One benefits the policy holder and one the beneficiaries of the policy.
Policyholders that have cash value policies will be relieved to know that any gains they make in their policies are currently tax- free.
Beneficiaries that receive a lump sum payment from an insurance policy will not have to claim that amount as part of their yearly income.
However, it is very important for everyone to understand that tax laws and IRS ruling change each year. It is always best to keep yourself informed about these issues each year.