What is the purpose of life insurance?
Life insurance serves several purposes. A sufficient amount of it can provide for your family and or loved ones after your demise. It can also help to pay for your funeral costs. It can be part of your estate or it can be in place of an estate for those who have no estate to leave behind. If the policy is a whole life as opposed to term, it will build up cash value which can be borrowed against, or even cashed in if need be. There are different payment options, it can be left as a lump sum or payable in a monthly annunity. It can also be payable to a heirarchy of beneficiaries such as a primary, a contigent benificiary and so on. It is also quite possible that it is exempt from certain taxes and creditors claims, but I'm not certain on this, can anyone else answer this one?
The primary purpose of life insurance is to provide financial protection for your family in case the policy holder dies. It ensures death benefits for your family and loved ones at a time when they may need it the most. The amount can be used to cover debts and liabilities and also provide a tidy sum for your family to secure their future.