Life insurance provides a lump sum of cash to your family or business (the beneficiary) in the untimely event of your death. Many families use life insurance to plan their future in case the breadwinner dies and the family would otherwise be facing undue financial hardship. The face amount of the life insurance policy is the amount that will be paid by the life insurance company in the event of the death of the insured. The monthly premiums can either be fixed or variable depending on the product you choose and you can receive interest or proceeds from investments on some forms of life insurance. Generally, the proceeds from a life insurance policy are income tax free.