What is the primary purpose of life insurance?

The primary purpose of life insurance is to replace income when you die. This financial product is specifically designed to provide financial support to your dependents in the event of your untimely death. By replacing the income you would have earned, life insurance ensures that your loved ones can maintain their standard of living, cover essential expenses, and fulfill obligations such as mortgage payments, children's education, and daily living costs.

While covering family expenses and creating a legacy are certainly important considerations for individuals when evaluating life insurance, they are secondary benefits that arise from the primary function of income replacement. Additionally, managing health care costs, although crucial, is typically not within the purview of life insurance; that responsibility falls more to health insurance products. Therefore, income replacement stands as the foundational purpose of life insurance, providing critical financial security to beneficiaries during a difficult time.