What is the primary purpose of life insurance?

The primary purpose of life insurance is to protect survivors from financial loss after an insured's death. When the insured person passes away, the life insurance policy pays out a death benefit to the beneficiaries. This benefit can help cover various financial burdens such as funeral costs, outstanding debts, mortgage payments, and day-to-day living expenses.

In this context, the intention behind life insurance is to provide financial security and peace of mind for the family or dependents of the insured. It ensures that their quality of life is maintained despite the absence of the insured's income. This principle underpins the concept of life insurance as a critical financial planning tool, aimed specifically at safeguarding the financial well-being of loved ones.

Other options may touch on aspects related to life insurance but do not encapsulate its central aim. For example, immediate funds for investment, covering medical expenses, or serving as a savings account are roles that may be associated with other financial products. The core focus of life insurance specifically revolves around the provision of financial support for beneficiaries in the event of the policyholder's death.