Immediate cash for payments of debts, burial expenses, costs of administration, other settlement costs, and, if necessary, payment of federal estate taxes thereby eliminating the possibility of a forced sale of assets to generate needed cash.

As it relates to business partners; funds for the surviving partner to buy the partnership interest of the deceased partner from the heirs. Thus enabling the business to continue as without interruption.

Cash when an heir has a contract to buy a family member's farm/ranch or other business at his/her death. The heir could insure the family member's life as a means of providing cash to purchase the business should the family member's death occur before the heir has built enough cash reserves.

In the case where there are several children involved life insurance proceeds can be used to provide "equitable" treatment if the parents' desire is to pass the business intact to a farming/ranching son or daughter. By doing so they can prevent forcing sale of the farm/ranch or having it split the property to make an "equal" division among children. Leaving the business to the operating heir and life insurance proceeds to other heirs prevents the operating heir from having to buy out the interests of other heirs which they may be unable to afford it. Life insurance can also be used to create an estate where one would not otherwise exist.

The major types of life insurance are term, whole life, universal life, variable life and adjustable life.

Term Insurance-provides financial protection for a limited, specified period of time. Because it provides temporary protection and does not generate a cash value, term insurance is the least expensive kind of protection. However, the premium for this protection will usually increase periodically, or the coverage will decrease.

A "basic-level" term insurance policy provides a constant amount of insurance and annual premiums for a fixed time, usually 5 or 10 years. An annually renewable term policy has yearly increases in premiums for the same amount of coverage. This type of policy is commonly referred to as a "yearly renewable" term policy.

There are two other variations of term insurance: increasing and decreasing.

Increasing term insurance, the face value of the policy periodically grows. Increasing term insurance is frequently sold in a package with other policies.

Decreasing term insurance, coverage declines in value from year to year or from month to month while premiums remain level. These policies are purchased for periods of time to match the period for which money will be needed. An example would be a policy that decreases as the mortgage on a home is paid.

Whole Life-as the name implies, provide a death benefit for the entire life of the insured. In addition they provide for a tax-deferred build up of cash values. The cost of whole life insurance is usually greater than term insurance during the early years. Premiums are paid over the life of the policyholder or for a specific period of time. When premiums are paid over the lifetime of the insured, the contract is called a "straight whole life" policy.

Also with whole life, you can borrow an amount from the insurance company up to the current cash value of the policy. You have the option of repaying the amount borrowed, or not at all. Bear in mind, if you elect not to repay the amount borrowed, it will be deducted from the death benefit provided to your beneficiaries.

Both Universal Life Insurance and Adjustable Life Insurance-offer flexible premium payments, an adjustable death benefit and cash values that are often tied to current interest rates. Most contracts pay a interest rate that is highly competitive with other options available in the money market. However, they do not guarantee these rates over the life of the contract. Premiums are deposited in a special fund. From this fund, the company deducts its fee and the monthly costs for the protection that covers the life of the policy-holder. After making these deductions, the company credits interest to the fund at the market rate.

Much of the appeal of universal life insurance stems from its tax treatment, which is the same as for other life insurance products that meet specific standards. Examples of this tax treatment include tax-deferred build-up of income and cash value and no income taxation of proceeds to the beneficiary.

Before buying always compare administrative costs of universal life insurance. Be sure to ask if the charges are front-loaded, that is, deducted before the premium is credited to your cash value or back-loaded paid if you surrender the policy.

Variable Life Insurance -death benefits and cash values fluctuate according to the investment experience of a separate account managed by the life insurance company. As such, policyholders may obtain higher cash values and death benefits than with policies calculating benefits based on a fixed rate of return. The downside is, policyholders also assume the risk of negative investment performance.

Life insurance agents selling variable life must be registered representatives of a broker-dealer licensed by the National Association of Securities Dealers and registered with the Securities and Exchange Commission. If you are considering this type of policy, be certain your agent provides you with a prospectus that contains extensive disclosure about the variable life policy. Review the prospectus carefully so that you understand the potential risks associated with the investment.