What is the primary function of life insurance?

Life insurance primarily serves to provide financial protection for beneficiaries in the event of the policyholder's death. This mechanism ensures that loved ones are financially supported and can maintain their standard of living despite the loss of income that results from the policyholder's passing. The financial benefit, often referred to as the death benefit, is a crucial safety net for families and dependents, covering expenses such as mortgage payments, educational costs, and other living expenses.

While saving for retirement, investing in the stock market, and accumulating cash value can be features or benefits associated with certain types of insurance products, they do not encapsulate the fundamental purpose of life insurance. Those aspects are secondary functions, primarily related to permanent life insurance policies rather than the overall role of life insurance as a means of providing immediate financial security and protection for beneficiaries upon the policyholder's death.