What is the primary purpose of life insurance?

The primary purpose of life insurance is to provide financial protection to beneficiaries upon the death of the insured. This type of insurance ensures that in the event of the policyholder's death, their designated beneficiaries will receive a sum of money, which can help them maintain their standard of living, cover daily expenses, or fulfill financial obligations like mortgage payments or education costs. This financial safeguard is crucial, as it offers peace of mind to individuals knowing that their loved ones will be supported financially if they are no longer able to provide for them.

While other options present valid uses or benefits associated with life insurance, they do not capture its primary objective. For instance, accumulating wealth for retirement is typically associated with investment products rather than the core purpose of life insurance, which is risk protection. Similarly, while life insurance can indirectly assist in managing debt through the provision of funds, its primary aim is not solely focused on debt repayment or covering medical expenses. These other financial needs can be aspects of financial planning but do not define the central role of life insurance.