The Promise and the Payout: A Narrative Guide to Life Insurance and Its Death Benefit

Introduction: Meet the Clark Family

Michael and Sarah Clark, a couple in their early thirties, stood in their new living room, surrounded by boxes.

With a new mortgage, a five-year-old starting school, and a toddler underfoot, the weight of their financial responsibilities felt as tangible as the unpacked furniture.

The conversation inevitably turned to financial protection.

“We need life insurance,” Michael said, looking through a brochure.

“But I’m confused.

What’s the difference between buying ‘life insurance’ and getting a ‘death benefit’? Aren’t they the same thing?”

Sarah nodded, sharing his uncertainty.

“It sounds like it.

You buy a policy, and if something happens, the family gets money.

But the terms are all over the place.”

This common point of confusion is the starting block for one of the most critical financial decisions a family can make.

This report aims to guide the reader, alongside the Clarks, from this initial state of uncertainty to a position of confidence and clarity.

By following their journey of discovery, we will demystify the language of life insurance, treating the life insurance policy as the strategic plan or vehicle, and the death benefit as the ultimate outcome or destination.

Part I: The Architecture of Financial Security

To build a solid financial plan, one must first understand the foundational vocabulary.

This section, mirroring the Clarks’ initial research, defines the core concepts and addresses the most basic, yet crucial, distinctions that often cause confusion.

Life Insurance: The Blueprint for a Promise

At its core, life insurance is not the money itself; it is a legal contract.¹

This contract represents a promise from an insurance company.

In exchange for regular payments, known as premiums, the company agrees to pay a specified sum of money upon the death of the insured person, as long as the policy is active.³

As Michael read through a policy definition, he explained it to Sarah: “So, the life insurance isn’t the payout.

It’s the agreement we make with the company.

It’s the blueprint for the promise.” This distinction is fundamental.

The life insurance policy is the entire framework—the set of rules, conditions, and guarantees that govern the relationship between the policyholder and the insurer.

The policyholder, who is responsible for paying the premiums, is not always the same as the insured person whose life is covered.¹

For instance, a business owner might purchase a policy on a key employee, making the business both the policyholder and the beneficiary.¹

This separation of roles becomes critically important when considering advanced planning and tax implications.

The Death Benefit: The Promise Delivered

If life insurance is the blueprint, the death benefit is the finished structure—the promise delivered.

The death benefit is the actual money paid out by the insurance company to the designated beneficiaries when the insured person dies.¹

It is the fulfillment of the promise outlined in the life insurance contract and the primary reason most people purchase coverage.⁶

Sarah reframed the concept, making it more tangible: “Okay, so the life insurance is the car, and the death benefit is the destination—the financial support that gets to our family if something happens to one of us.” This money can be used for any purpose the beneficiaries see fit.

There are no stipulations or conditions on how the funds are spent.⁶

Common uses include replacing lost income, paying off a mortgage, covering final expenses like funeral costs, funding a child’s education, or leaving a legacy to a charity.¹

Beneficiaries can be individuals, a trust, a charitable organization, or a business.⁶

One of the most significant advantages of the death benefit is that it is generally paid to the beneficiary free from federal income tax, making it a highly efficient way to transfer wealth and provide support during a difficult time.¹

Face Amount vs. Reality: Why the Number on the Cover Isn’t Always the Final Payout

A critical point of confusion arises from the terms “face amount” and “death benefit.” People often use them interchangeably, but they represent different concepts.

The face amount is the initial coverage amount stated on the policy agreement—the number on the front page when the policy is first issued.³

When someone says they have a “$500,000 life insurance policy,” they are referring to the face amount.⁶

However, the death benefit is the actual amount the beneficiaries receive, which can be different from the face amount.

The face amount is a static promise made at the policy’s inception, while the death benefit is the dynamic reality at the end of the policy’s journey.¹²

This dynamism is a source of both opportunity and risk, as the final payout can be adjusted by actions taken during the policyholder’s life.

For example, if Michael and Sarah were to buy a policy with a $500,000 face amount and later took a $50,000 loan against the policy’s cash value that they didn’t repay, their beneficiaries would receive a death benefit of $450,000.⁵

Outstanding loans, withdrawals from the policy’s cash value, and unpaid premiums are all deducted from the face amount to determine the final death benefit.⁹

Conversely, certain policy add-ons, known as riders, can increase the death benefit.

An accidental death benefit rider, for instance, could double the face amount if the death results from a covered accident.¹⁴

Dividends paid by some insurers can also be used to purchase additional coverage, increasing the total death benefit over time.¹³

Understanding that the number on the policy’s cover is a starting point, not a guaranteed final figure, is essential for responsible policy management.

Part II: Choosing Your Vehicle: How Policy Type Defines the Journey

Once the Clarks understood the basic architecture, their next question was, “Which type of policy is right for us?” The type of life insurance chosen is the vehicle for the financial journey; it defines the cost, duration, and features available along the way. The choice often comes down to a trade-off between certainty and control, temporary needs and lifelong goals.

The Direct Route: Term Life Insurance

Term life insurance is the most straightforward and affordable type of coverage.

It provides pure protection for a specific period, or “term,” such as 10, 20, or 30 years.¹

If the insured person dies during this term, the insurance company pays the death benefit to the beneficiaries.

If they outlive the term, the policy simply expires, and no benefit is paid.⁵

Because it has no savings or investment component (known as cash value), term life is the least expensive option available.⁷

This makes it an ideal vehicle for covering temporary, high-need periods.

For the Clarks, their 30-year mortgage and the 20-plus years until their youngest child is financially independent represent their largest liabilities.

A 30-year term policy offers an affordable way to secure a large death benefit that matches the timeline of these specific needs.³

Premiums are typically guaranteed to remain level for the entire term, providing predictable costs.¹⁵

This aligns with the popular financial strategy to “buy term and invest the difference,” where one purchases affordable term coverage and invests the savings from not buying a more expensive policy elsewhere.⁷

The Lifelong Voyage: Permanent Life Insurance and the Cash Value Engine

In contrast to the temporary nature of term insurance, permanent life insurance is designed to provide coverage for the insured’s entire life, as long as premiums are paid.¹

These policies have a dual function: they include a death benefit to protect beneficiaries and an internal savings or investment component called

cash value.⁹

The higher premiums associated with permanent policies are what fund this dual structure.

A portion of each premium payment covers the cost of insurance and administrative fees, while the remainder is allocated to the cash value account, which grows on a tax-deferred basis.¹⁸

This cash value acts as a living benefit, a financial resource that the policyholder can access during their lifetime through loans or withdrawals.³

Years after their initial purchase, as the Clarks’ income grows and their focus shifts from pure debt coverage to long-term estate planning, they might consider a permanent policy.

The ability to build a tax-advantaged asset they can tap into for emergencies, supplemental retirement income, or business opportunities makes permanent insurance a more complex but versatile financial tool.¹⁸

A Tale of Two Paths: Whole Life vs. Universal Life

Within the world of permanent insurance, two main paths emerge, each offering a different balance of guarantees and flexibility.

The choice between them often reflects an individual’s risk tolerance and preference for certainty versus control.

Whole Life Insurance: The Path of Predictability

Whole life insurance is the most traditional form of permanent coverage.

It is defined by its guarantees.

Policyholders receive a guaranteed death benefit, guaranteed level premiums that will never increase, and a guaranteed minimum rate of return on the cash value’s growth.17 This predictability makes it a stable, low-maintenance option.

Many whole life policies issued by mutual insurance companies are also eligible to receive non-guaranteed annual dividends, which can be taken as cash, used to reduce premiums, or used to purchase additional coverage, further increasing the policy’s death benefit and cash value.17 For someone like Michael, who values stability and wants to “set it and forget it,” the rigid guarantees of whole life are appealing.

Universal Life (UL) Insurance: The Path of Flexibility

Universal life insurance is a more modern and flexible form of permanent coverage.

Its hallmark feature is the ability for the policyholder to adjust premium payments and the death benefit amount over time, within certain limits.14 For example, a policyholder could pay higher premiums in high-income years to build cash value faster or reduce payments during a tight financial period, letting the accumulated cash value cover the policy’s costs.23 However, this flexibility comes at the cost of the guarantees found in whole life.

The cash value growth is often tied to current interest rates, and the policy’s internal costs can increase over time.22 If the policy is not sufficiently funded with premiums, the cash value can be depleted, potentially causing the policy to lapse and coverage to terminate.14 For someone like Sarah, who is intrigued by the ability to adapt the policy to life’s changing financial circumstances, the control offered by universal life is attractive.

Table 1: Comparative Analysis of Life Insurance Policies

To help visualize these differences, the following table provides an at-a-glance comparison of the primary life insurance vehicles.

Feature	Term Life Insurance	Whole Life Insurance	Universal Life Insurance
Coverage Duration	For a specific term (e.g., 10-30 years); expires if outlived.7	Lifelong, as long as premiums are paid.17	Lifelong, as long as the policy is sufficiently funded.22
Premium Structure	Lowest cost; premiums are fixed for the term.7	Higher cost; premiums are fixed and guaranteed for life.16	Flexible; premiums can be adjusted within limits.14
Cash Value	No cash value component.7	Yes; grows at a guaranteed minimum rate.17	Yes; growth is tied to current interest rates or market performance.20
Death Benefit	Guaranteed level amount for the term.15	Guaranteed level amount, can be increased with dividends.17	Flexible; can be increased or decreased by the policyholder.14
Primary Use Case	Covering temporary needs like mortgages and raising children.3	Lifelong needs like estate planning, final expenses, and wealth transfer.16	Lifelong needs for those who want flexibility to adapt to changing finances.22
Key Pro	Maximum affordability and simplicity.7	Strong guarantees and predictability.17	High degree of flexibility and control.14
Key Con	Coverage is temporary and builds no equity.8	High premiums and less flexibility.16	Requires active management and can lapse if underfunded.14

Part III: Navigating Life’s Detours: How the Death Benefit Can Change

A life insurance policy is not a static document locked in a vault.

It is a living financial instrument that can and often does change over its lifespan.

The death benefit, initially set as the face amount, can be altered by life events, financial needs, and the specific features built into the policy.

Understanding this dynamic nature is key to ensuring the policy continues to meet its intended purpose.

The Living Benefit Paradox: Tapping into Cash Value

One of the most powerful features of permanent life insurance is the ability to access its cash value while the insured is still alive.

However, this creates a fundamental paradox: the death benefit is the collateral for this present-day liquid asset, and every dollar used for “living benefits” today is a dollar removed from the “death benefit” tomorrow.⁹

• Policy Loans: A policyholder can take a loan against their cash value, often at a favorable interest rate and without a credit check. This is a tax-free way to access cash for any reason, such as funding a business venture, paying for education, or handling an emergency.¹⁸ If Michael and Sarah were to take a loan from their policy, they would not be required to repay it. However, if the insured dies before the loan is repaid, the outstanding loan balance plus any accrued interest is deducted from the death benefit paid to the beneficiaries.⁹
• Withdrawals: A policyholder can also make a direct withdrawal from their cash value. Unlike a loan, a withdrawal does not accrue interest and does not need to be repaid. However, it permanently reduces both the cash value and the death benefit of the policy.⁵

It is also a common misconception that upon death, beneficiaries receive both the death benefit and the accumulated cash value.

In most standard policies, this is not the case.

The insurance company pays out the policy’s death benefit, and any remaining cash value is absorbed by the insurer.⁶

Customizing the Blueprint with Riders

Riders are optional provisions that can be added to a life insurance policy to enhance or customize its coverage, often for an additional premium.¹

Many riders transform the policy from a purely reactive tool (paying out after death) into a proactive one, providing funds during a major life crisis.

The most common of these is the Accelerated Death Benefit (ADB) rider.

This feature allows a policyholder diagnosed with a terminal, chronic, or critical illness to access a significant portion of their own death benefit while they are still alive.⁵

If Sarah’s father were diagnosed with a terminal illness, this rider would allow him to receive funds to pay for medical care, improve his quality of life, or get his financial affairs in order.

The amount advanced is then subtracted from the final death benefit paid to his beneficiaries.²⁶

Other important riders include:

• Accidental Death Benefit Rider: Provides an additional payout, often doubling the face amount, if death occurs as the result of a covered accident.¹
• Waiver of Premium Rider: If the insured becomes totally disabled and unable to work, the insurance company waives the premium payments, keeping the policy in force.¹
• Inflation Rider: Automatically increases the death benefit over time to help its purchasing power keep pace with inflation, though this comes with a higher premium.²⁷

Charting the Payout’s Trajectory: Level, Increasing, and Decreasing Benefits

The death benefit does not have to be a fixed number.

It can be structured to change over time, aligning the coverage more closely with evolving financial needs.

• Level Death Benefit: This is the standard and most common structure, where the death benefit remains the same for the life of the policy.²⁷ It offers predictability and simplicity.
• Decreasing Death Benefit: Primarily found in term policies, this structure features a death benefit that declines over time, usually on an annual basis. These policies are often used to cover a specific liability that also decreases over time, such as a mortgage. As the mortgage balance is paid down, the need for coverage shrinks, and the policy reflects this. These policies are less expensive than level term policies.⁷
• Increasing Death Benefit: This option allows the death benefit to grow over the policy’s life, which can be a valuable hedge against inflation or be used to accommodate a growing family’s needs.²⁶ This feature comes with higher premiums than a level benefit policy.²⁷
• Variable Death Benefit: Available in certain Universal Life policies, this option links the death benefit to the performance of underlying investment subaccounts. The total death benefit consists of a guaranteed face value plus the policy’s cash value, which can fluctuate with market performance.²⁹

Part IV: The Final Chapter: The Beneficiary’s Perspective

The journey of a life insurance policy culminates in its final purpose: providing for a beneficiary.

This section shifts the narrative focus to a future where Michael has passed away, and Sarah must navigate the emotional and administrative process of receiving the death benefit.

For a beneficiary, the payout is not an end, but the beginning of a new financial life.

The Claims Process: A Step-by-Step Guide for Sarah

Filing a life insurance claim is a straightforward, though emotionally challenging, process.

The policyholder’s organization during their life is causally linked to the smoothness of the beneficiary’s experience.

In this scenario, Michael had prepared a “beneficiary information packet” containing the policy documents, the insurer’s contact information, and a note on where to find the necessary records.

This simple act of stewardship transforms a potentially confusing ordeal into a manageable series of steps for a grieving Sarah.

The typical claims process is as follows:

1. Notify the Insurer: The first step is to contact the insurance company to inform them of the insured’s death and begin the claims process.¹
2. Complete the Claim Form: The insurer will provide a claim form, often called a “Request for Benefits,” which must be completed by the beneficiary.⁶
3. Provide Documentation: The most critical document required is a certified copy of the death certificate. This is the official proof of death that the insurer needs to process the claim.⁵
4. Claim Review and Payout: Once the insurer receives the completed form and death certificate, they will verify the information and approve the claim. The death benefit is typically paid out within 30 to 60 days.⁵

A significant advantage of life insurance is that the death benefit is paid directly to the named beneficiary and does not have to go through the probate process.

Probate is the legal court process for settling an estate, which can be public, time-consuming, and costly.

By bypassing probate, the death benefit provides swift financial relief when it is needed most.⁵

The Payout Decision: Structuring the Financial Future

Receiving the death benefit is a pivotal moment.

The insurance company presents Sarah with several options for how to receive the funds.

This decision is her first major act of financial stewardship in her new life and will have long-term consequences for her family’s security.

• Lump Sum: This is the most common and often the default option. The beneficiary receives the entire death benefit in one single payment.³⁰ It provides maximum flexibility and immediate liquidity to pay off large debts like a mortgage, cover immediate expenses, or make investments.¹³
• Annuity / Installments: With this option, the insurance company holds the proceeds and pays them out to the beneficiary in a series of regular payments. This can be structured to last for a fixed period (e.g., 20 years) or for the beneficiary’s entire lifetime (a life annuity).¹³ This converts the death benefit into a stable, predictable income stream, which can be ideal for long-term income replacement.
• Retained Asset Account (RAA): Some insurers offer to place the death benefit into an interest-bearing account that the beneficiary can access using a checkbook.¹³ This option blends the liquidity of a checking account with the potential to earn interest on the remaining balance.
• Interest-Only: The insurer holds the principal amount of the death benefit and pays only the interest earned on it to the primary beneficiary. Upon the primary beneficiary’s death, the original principal is then paid to a secondary beneficiary.¹ This is useful for providing income to one person while preserving the principal for another.

Table 2: Analysis of Death Benefit Payout Options

The choice of payout method depends entirely on the beneficiary’s individual circumstances, financial literacy, and long-term goals.

Payout Option	How it Works	Best For (Scenario)	Key Advantage	Key Disadvantage	Tax Implication
Lump Sum	Beneficiary receives the entire death benefit at once.30	Paying off large, immediate debts (e.g., mortgage) or for those confident in managing a large sum.13	Maximum control and immediate liquidity.13	Risk of mismanagement or rapid depletion of funds.13	The principal is income tax-free. Subsequent earnings on investments are taxable.10
Fixed-Period Annuity	Proceeds are paid in regular installments over a set number of years.13	Providing a stable income stream for a specific period, like until children are grown.13	Predictable income; protects principal from being spent too quickly.13	Less flexibility than a lump sum; payments end after the period.32	The principal portion of each payment is tax-free; the interest portion is taxable income.33
Lifetime Annuity	Proceeds are paid in regular installments for the beneficiary’s entire life.13	Ensuring a beneficiary, particularly an older one, does not outlive their money.13	Guaranteed income for life, regardless of longevity.32	Payments may be smaller than other options; remaining principal may revert to the insurer upon death.13	The principal portion is tax-free; the interest portion is taxable income.33
Retained Asset Account	Insurer holds funds in an interest-bearing account accessible via checkbook.13	Beneficiaries who want flexibility and easy access but don’t need all the funds at once.13	Combines liquidity with the potential to earn interest.13	Interest rates may be low; FDIC insurance may not cover the full amount.30	The principal is tax-free; interest earned in the account is taxable income.13
Interest-Only	Insurer holds the principal and pays out only the interest earned.1	Providing income for one beneficiary (e.g., a spouse) while preserving the principal for another (e.g., a child).13	Provides income without depleting the original death benefit.32	The beneficiary never receives the principal amount.13	Interest payments are fully taxable as income.10

Part V: The Tax Question: Keeping the Promise Intact

One of the most powerful features of life insurance is its favorable tax treatment.

However, this benefit is not absolute.

The tax implications of a death benefit are determined almost entirely by the legal structure of the policy’s ownership and beneficiary designations.

Understanding these rules is crucial to preserving the full value of the benefit for loved ones.

The General Rule: A Tax-Free Lifeline

In the vast majority of cases, the fundamental rule holds true: life insurance proceeds paid to a beneficiary due to the death of the insured person are not includable in the beneficiary’s gross income for federal tax purposes.¹⁰

When Sarah receives the check from the insurer, she does not have to report that principal amount as income to the IRS.¹¹

This ensures that the full intended financial support reaches the family without being diminished by income taxes.

Navigating the Exceptions: When the Taxman Calls

While the general rule is a significant advantage, several specific scenarios can create a taxable event, eroding the value of the death benefit.

1. Interest Earned on Payouts: The tax-free status applies to the death benefit principal itself. If a beneficiary, like Sarah, chooses a payout option other than a lump sum (such as an annuity or installment plan), the insurance company holds the principal and it earns interest. While the portion of each payment that represents the principal is tax-free, the interest portion is considered taxable income and must be reported to the IRS.¹⁰
2. Inclusion in a Taxable Estate: If a policyholder names their “estate” as the beneficiary instead of a specific person or trust, the death benefit proceeds become part of the estate.¹¹ This means the money must go through probate and can be used to pay the deceased’s outstanding debts before being distributed to heirs. More importantly, it increases the value of the taxable estate. While the federal estate tax exemption is very high (over $13 million per individual in 2024), if the total estate value exceeds this threshold, the life insurance proceeds could be subject to federal estate taxes.¹¹
3. The “Goodman Triangle” (Gift Tax Trap): This classic tax trap occurs when a policy involves three different parties in the key roles:

• The Owner (who pays the premiums)
• The Insured (whose life is covered)
• The Beneficiary (who receives the payout)

For example, if Sarah (Owner) buys a policy on Michael’s life (Insured) and names their child as the Beneficiary, a taxable event occurs when Michael dies.

The death benefit paid to the child is considered a taxable gift from Sarah to the child, because she owned the policy.¹¹

4. Transfer-for-Value Rule: If a life insurance policy is sold or transferred to another party for cash or other “valuable consideration,” it generally loses its income-tax-free status. The death benefit proceeds may then become taxable to the recipient, limited to the amount they paid for the policy plus any subsequent premiums paid.¹⁰

These exceptions highlight that the seemingly simple administrative choices of naming an owner and a beneficiary are, in fact, critical strategic decisions with potentially significant financial consequences.

Conclusion: From Confusion to Confidence

The journey of the Clark family, from their initial confusion in a room full of boxes to Sarah’s ability to secure her family’s future, illustrates the profound difference between simply buying a product and executing a well-understood financial strategy.

They learned that life insurance is the proactive plan and the contractual vehicle purchased and managed during life.

It is the blueprint, the car, the strategy.

The death benefit is the reactive payout and the financial outcome that beneficiaries receive after death.

It is the destination, the result of that strategy, shaped by the policy type chosen, the actions taken, and the structures put in place along the Way.

Sarah, armed with the death benefit, was able to pay off the mortgage, maintain her family’s standard of living, and create a fund for her children’s education.

The promise she and Michael made to each other years ago was fulfilled because they took the time to move from confusion to confidence.

Actionable Recommendations

Based on this comprehensive analysis, several key recommendations emerge for both policyholders and their beneficiaries.

For Policyholders:

• Review Your Plan: Life is not static, and neither is your financial plan. Regularly review your life insurance policy, especially after major life events like marriage, the birth of a child, or a significant change in assets.
• Check Designations: Pay close attention to ownership and beneficiary designations. As demonstrated, these administrative details can have massive tax implications. Avoid naming your estate as a beneficiary unless it is part of a specific, advanced trust strategy advised by a legal professional.
• Create a Beneficiary Packet: Do not let your policy be a secret. Create a folder—physical or digital—that contains the policy number, the insurance company’s name and contact information, and instructions for your beneficiary. Communicate its location clearly. This simple act of organization can alleviate immense stress for a grieving loved one.

For Beneficiaries:

• Understand Your Options: Know that you have choices. Do not feel rushed into a decision about how to receive the death benefit payout.
• Seek Professional Advice: For a substantial payout, it is wise to consult with a trusted, fee-only financial advisor and a tax professional. They can help you understand the long-term implications of each payout option and create a plan to manage the funds effectively.
• Ask Questions: Do not hesitate to ask the insurance company to clarify the terms of each payout option, including any fees or tax reporting documents you will receive.

Ultimately, understanding the distinction between the life insurance contract and its resulting death benefit transforms an intimidating product into one of the most powerful and effective tools available for protecting a family’s financial future and ensuring a promise made is a promise kept.

Works cited

1. Life Insurance: What It Is, How It Works, and How to Buy a Policy, accessed on July 29, 2025, https://www.investopedia.com/terms/l/lifeinsurance.asp
2. How Much Life Insurance Should You Have? – Investopedia, accessed on July 29, 2025, https://www.investopedia.com/articles/pf/06/insureneeds.asp
3. Life Insurance: How to Find the Right Policy for You (June 2025) – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/insurance/life/life-insurance-policies
4. What Is Life Insurance and How Does It Work? – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/l/life-insurance-dsa-6
5. What Is the Life Insurance Death Benefit? – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/article/insurance/life-insurance-death-benefit
6. Life Insurance Death Benefits: What You Need to Know | Guardian, accessed on July 29, 2025, https://www.guardianlife.com/life-insurance/death-benefits
7. Term Life Insurance: What It Is, Different Types, Pros and Cons – Investopedia, accessed on July 29, 2025, https://www.investopedia.com/terms/t/termlife.asp
8. Lancaster Life Insurance | Insuring Pennsylvania, accessed on July 29, 2025, https://www.forbes-insurance.com/insurance-services/life-insurance/
9. Insurance Policy Death Benefits and Cash Values – Investopedia, accessed on July 29, 2025, https://www.investopedia.com/ask/answers/050615/what-difference-between-death-benefit-and-cash-value-insurance-policy.asp
10. Life Insurance & Disability Insurance Proceeds | Internal Revenue …, accessed on July 29, 2025, https://www.irs.gov/faqs/interest-dividends-other-types-of-income/life-insurance-disability-insurance-proceeds/life-insurance-disability-insurance-proceeds
11. Is Life Insurance Taxable? | New York Life, accessed on July 29, 2025, https://www.newyorklife.com/articles/is-life-insurance-taxable
12. Comparing Face Amount Vs. Death Benefit in Policies – 1891 Financial Life, accessed on July 29, 2025, https://www.1891financiallife.com/comparing-face-amount-vs-death-benefit-in-policies/
13. How Life Insurance Payouts Work | Bankrate, accessed on July 29, 2025, https://www.bankrate.com/insurance/life-insurance/how-life-insurance-payouts-work/
14. Life insurance guide, accessed on July 29, 2025, https://www.tdi.texas.gov/pubs/consumer/cb018.html
15. What Is Term Life Insurance, and How Does It Work? – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/article/insurance/what-is-term-life-insurance
16. Term life vs. whole life insurance | Empower, accessed on July 29, 2025, https://www.empower.com/the-currency/money/difference-between-term-whole-life-universal-life-insurance
17. How Does Whole Life Insurance Work? – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/article/insurance/whole-life-insurance
18. Buying Life Insurance As An Investment – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/article/insurance/life-insurance-as-an-investment
19. What Is Life Insurance and How Does It Work? – NerdWallet, accessed on July 29, 2025, https://www.nerdwallet.com/article/insurance/life-insurance-premium
20. Whole Life Vs. Universal Life Insurance | Progressive, accessed on July 29, 2025, https://www.progressive.com/answers/whole-life-vs-universal-life-insurance/
21. FAQs • What happens to the cash value in my policy when I di – SC Department of Insurance, accessed on July 29, 2025, https://doi.sc.gov/FAQ.aspx?QID=350
22. Whole Life vs Universal Life Insurance | New York Life, accessed on July 29, 2025, https://www.newyorklife.com/articles/whole-life-vs-universal-life-insurance
23. Universal life insurance vs term: what you need to know – Thrivent Financial, accessed on July 29, 2025, https://www.thrivent.com/insights/life-insurance/universal-life-insurance-vs-term-what-you-need-to-know
24. Universal Life Insurance vs. Whole Life Insurance – Aflac, accessed on July 29, 2025, https://www.aflac.com/resources/life-insurance/universal-life-insurance-vs-whole-life-insurance.aspx
25. Term vs Whole Life vs Universal Life – OC Federal Credit Union, accessed on July 29, 2025, https://www.ocfederal.com/blog/term-vs-whole-life-vs-universal-life/
26. Understanding death benefits and life insurance – TruStage, accessed on July 29, 2025, https://www.trustage.com/learn/life-insurance/death-benefits-life-insurance
27. Level Death Benefit: What It Means, How It Works, Example – Investopedia, accessed on July 29, 2025, https://www.investopedia.com/terms/l/level-death-benefit.asp
28. What is Increasing Term Life Insurance? | Aflac, accessed on July 29, 2025, https://www.aflac.com/resources/life-insurance/what-is-increasing-term-life-insurance.aspx
29. Variable Death Benefit: Meaning, Pros and Cons, Example – Investopedia, accessed on July 29, 2025, https://www.investopedia.com/terms/v/variabledeathbenefit.asp
30. How does a life insurance payout work? – Progressive, accessed on July 29, 2025, https://www.progressive.com/answers/how-does-life-insurance-pay-out/
31. Average Life Insurance Payout – Aflac, accessed on July 29, 2025, https://www.aflac.com/resources/life-insurance/average-life-insurance-payout.aspx
32. Life Insurance Death Benefits: You Have Options – AAFMAA, accessed on July 29, 2025, https://www.aafmaa.com/learning-hub/blog/post/9407/life-insurance-death-benefits-you-have-options
33. Are Life Insurance Proceeds Taxable? What You Should Know – Guardian Life, accessed on July 29, 2025, https://www.guardianlife.com/life-insurance/taxable
34. Life Insurance Proceeds – Death Benefit – TaxAct, accessed on July 29, 2025, https://www.taxact.com/support/14226/life-insurance-proceeds-death-benefit
35. Do Life Insurance Beneficiaries Have to Pay Taxes on Inheritance? – Bankers Life, accessed on July 29, 2025, https://www.bankerslife.com/insights/understanding-insurance/do-life-insurance-beneficiaries-have-to-pay-taxes-on-inheritance/