What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial security for dependents after the wage earner's death. When the insured person passes away, the life insurance policy pays a death benefit to the beneficiaries, which is often used to replace lost income. This financial support can help dependents cover daily living expenses, pay off debts, or fund future needs like education. The intention is to ensure that loved ones maintain their standard of living and financial stability despite the loss of the primary income earner.

While life insurance can also contribute to covering funeral expenses, saving for retirement, or even, in some cases, managing medical costs linked to terminal illnesses, the main focus remains on providing income to those left behind, thereby protecting the financial interests of dependents in times of uncertainty.