What is the primary purpose of life insurance?

The primary purpose of life insurance is to ensure financial support for dependents after the insured person's death. This financial support is crucial because, upon the death of an income earner, family members or dependents may face significant financial challenges. Life insurance provides a death benefit that can cover immediate expenses, ongoing living costs, and future obligations such as education or mortgage payments, thereby helping to sustain the dependents' quality of life during a difficult time.

Policies are designed specifically to offer peace of mind to the insured and their family that, even in the unfortunate event of their passing, the dependents will have some form of financial security to navigate their lives. This fundamental aspect distinguishes life insurance from other financial products which may be more focused on investment or personal loan facilitation.