Chances are good that you own one or more life insurance policies. Whether you purchased a policy as part of a group offering through your employer or you went out and bought one on your own, you likely understand the basic function of a life insurance policy—to provide financial security to a family or to loved ones in the event of your death. While this is the basic function of a life insurance policy, it can do much more. Consider the following information that you may not know about life insurance:

You can purchase term or whole life. Term is simple with a set benefit amount while the various whole life options provide an investment option as well.
Life insurance proceeds are paid out almost immediately without the need to pass through the often lengthy process of probate.
Life insurance proceeds are not taxed
You can typically name more than one beneficiary
You can purchase a policy that has as its sole purpose the payment of your funeral and burial expenses. If you elect to do this, you may wish to create a trust and name the trust as the beneficiary of the policy and then direct the trust to pay the funeral and burial expenses.
A life insurance policy can also be used to fund estate tax expenses. If you know that your estate’s value will exceed the lifetime exemption amount then purchasing a life insurance policy may be a good idea. The policy will provide instant funds to cover the taxes so that your beneficiaries do not have to sell any estate assets in order to pay the taxes.