What does life insurance provide to beneficiaries?

Life insurance primarily provides cash benefits to beneficiaries upon the death of the insured person. This financial support is designed to help cover various expenses that may arise due to the loss of the insured, such as ongoing living expenses, mortgage payments, children's education, or any other financial responsibilities that the beneficiaries may face. The death benefit is typically paid out tax-free, allowing beneficiaries to have direct access to funds in a time of emotional and financial need.

While life insurance can help indirectly with expenses related to medical costs, funeral services, and unpaid debts, the core function of a life insurance policy is to offer a lump sum payment to the beneficiaries when the insured passes away. This payment provides critical financial security and peace of mind for the loved ones left behind, which directly aligns with the purpose of life insurance.