What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial protection to beneficiaries in the event of the policyholder's death. This financial support can help cover various expenses that may arise due to the loss of the insured, such as funeral costs, outstanding debts, and everyday living expenses for dependents. Life insurance ensures that the insured's loved ones can maintain their financial stability and continue to meet their financial obligations during a challenging time.

While accumulating savings for retirement, avoiding taxes on investments, and funding educational expenses are important financial goals, they are not the main focus of life insurance. Life insurance specifically addresses the need for protection and security for the individuals or entities that depend on the insured for financial support. Thus, the essence of life insurance lies in its role as a safety net for beneficiaries rather than as an investment tool or a means to achieve other financial objectives.