What is the primary function of life insurance?

The primary function of life insurance is to offer financial support to beneficiaries upon the insured's death. This coverage ensures that in the event of the policyholder's death, their selected beneficiaries receive a death benefit, which can be used to cover various financial needs such as mortgage payments, education expenses, or everyday living costs. The purpose of this benefit is to provide economic security and peace of mind to the loved ones left behind, ensuring they are not financially burdened during a difficult time.

While life insurance can have features that aid in savings for retirement or provide funds that contribute to funeral expenses, these are not its main functions. Life insurance is fundamentally about protection from loss of income due to the death of the insured—and it focuses primarily on the financial well-being of the beneficiaries rather than on the policyholder's savings or health care expenses.