What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial security for dependents after the policyholder's death. When an individual passes away, their family or beneficiaries may face financial hardships due to the loss of the policyholder's income. Life insurance serves to mitigate this situation by offering a death benefit, which can be used to cover living expenses, pay off debts, and maintain the quality of life for those left behind. This financial safeguard helps ensure that dependents are supported during a challenging time, allowing them to cover essential needs such as housing, education, and daily living expenses without the financial strain that may accompany the loss of a loved one.

While life insurance can also help in accumulating cash value over time, covering healthcare costs, or contributing to retirement income, these functions are secondary to its primary role of providing financial support to those who rely on the insured for their economic stability.