What is the primary purpose of life insurance?

The primary purpose of life insurance is to ensure financial support upon a policyholder's death. This financial product is designed to provide a death benefit to the beneficiaries designated by the policyholder, which can be used to cover various expenses such as funeral costs, outstanding debts, and ongoing living expenses for loved ones. By doing so, life insurance helps to alleviate the financial burden on family members or dependents during a challenging time, ensuring their financial stability even after the policyholder has passed away.

While other options address important financial needs, they do not align with the core function of life insurance. Coverage for home damages relates to homeowner's insurance, medical expenses pertain to health insurance, and managing investment funds for retirement connects to retirement planning products. Life insurance specifically targets financial protection and security for loved ones in the event of a policyholder's death, making it a vital tool for estate planning and financial planning.