What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial protection to beneficiaries upon the death of the insured individual. Life insurance is designed to ensure that in the event of the policyholder's death, their dependents or other designated beneficiaries receive a monetary benefit. This death benefit can help replace lost income, cover living expenses, manage financial obligations such as mortgage payments, and provide funds for future needs like education for children.

While life insurance may have additional benefits, such as cash value accumulation or being used as a financial planning tool, its fundamental purpose remains to safeguard the financial well-being of loved ones after the policyholder's passing. This core function distinguishes it from other financial products that may focus primarily on investment gains or specific costs like debt repayment or funeral expenses alone.