Such policies accumulate cash value on a tax-deferred basis that can be used for future needs such as supplementing your retirement income or helping provide for a child's education. The ability to earn an income can be considered your family's most valuable asset because your income allows you to obtain other assets, necessities of life, and luxuries. However, the ability to earn an income is not guaranteed, and the need for income may continue for those who are financially dependent on you. So, your need for life insurance, and the amount will depend on your personal and financial circumstances. You don't pay taxes on any cash value accumulated until you receive funds from the policy.
Life insurance is a long-term commitment.
This is the least expensive type of coverage, at least initially, and the simplest. These policies do not build a cash value. The coverage is in effect for a fixed term, usually 1 to 20 years, and is usually renewable each term. The policy pays your beneficiary a fixed amount of money if you die during the term of the policy. The premiums are lowest when you are young, and increase as you get older.