What is the primary purpose of life insurance?

The primary purpose of life insurance is to offer financial protection to beneficiaries upon the death of the insured. This type of insurance is designed to alleviate the financial burden that the loss of an individual may impose on their loved ones. When the insured passes away, the life insurance policy pays out a death benefit to the named beneficiaries, providing them with funds to cover various expenses such as funeral costs, ongoing living expenses, and even future financial obligations.

While other options touch on aspects of financial planning and security, they do not capture the core function of life insurance, which is to ensure that financial support is available to dependents and loved ones in the event of the policyholder's death. The focus is specifically on the death benefit, which distinguishes life insurance from other types of insurance or financial products that may serve different purposes.