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 coverage ensures that the loved ones left behind are financially secure and can maintain their standard of living, settle debts, and fulfill ongoing financial obligations without the burden of loss. Life insurance acts as a safety net, offering peace of mind knowing that there will be funds available to support dependents or fulfill other financial commitments at a critical time.

While investment growth, covering funeral expenses, and retirement savings are potential aspects of certain insurance products or financial strategies, they do not reflect the fundamental role of life insurance. The central aim remains the protection and support of the policyholder's beneficiaries after the policyholder’s passing.