What is the primary purpose of a life insurance policy?

The primary purpose of a life insurance policy is to provide a death benefit. This benefit ensures that in the event of the policyholder's death, their designated beneficiaries receive a sum of money. This financial protection is crucial for those who have dependents or loved ones who rely on their income. The death benefit can help cover ongoing expenses, debts, or even future financial needs that may arise due to the loss of the insured individual.

While accumulating cash value, funding retirement, or covering college expenses can be additional benefits or goals associated with certain types of life insurance policies, they are not the core function of life insurance. The fundamental intent of life insurance remains to offer financial security to beneficiaries upon the policyholder's death.