Life insurance proceeds are what the life insurance company pays to the insured or his beneficiaries as a result of a claimable event, such as the death of the insured person.
Premiums cover the cost of your life insurance policy. This amount is determined by the actuarial department of the life insurance company. The computations take into consideration mortality, as well as expenses such as insurance company overhead and insurance agent's commissions.
Since the life insurance premiums are based on mortality tables, premiums will vary depending on your gender, age, health situation and whether you smoke or not, in addition to other risk factors taken into consideration by the insurer which may affect your longevity.
The life insurance premiums are also dependent on the kind of life insurance policy you purchase. If it's a term life policy, the premiums will be much lower compared to a whole life or return of premium life insurance policy.
The proceeds form your life insuranc epolicy are usually paid tax free, after the beneficiaries have provided sufficient proof as to the life insurance death claim and proof of their identity as beneficiaries.