What is the main purpose of life insurance?

The main purpose of life insurance is to provide a financial safety net for beneficiaries. When an individual passes away, life insurance pays a predetermined benefit to their designated beneficiaries. This benefit can help the deceased's loved ones manage expenses such as mortgage payments, education costs, and daily living expenses, alleviating financial strain during a difficult time. It is fundamentally designed to ensure that beneficiaries have financial support in the event of the policyholder's death, allowing them to maintain their standard of living and fulfill obligations without the financial burden that the loss of income can bring.

While accumulating savings for retirement, paying off debts, and providing tax benefits are acknowledged features or potential advantages of life insurance policies, they do not encompass the primary objective of life insurance itself, which is focused on protecting the financial well-being of the insured's dependents in the event of their passing.