Life insurance serves as a financial protection tool for the policyholder's loved ones in the event of their death. The beneficiaries named in the policy can use the death benefit to cover various expenses, such as funeral costs, outstanding debts, mortgage payments, living expenses, education costs, and more. The purpose of life insurance is to provide financial stability and support to the surviving family members or dependents after the insured's passing.

There are different types of life insurance policies available, including term life insurance and permanent life insurance. Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. If the insured person dies during the term, the death benefit is paid to the beneficiaries. Permanent life insurance, on the other hand, covers the insured person's entire lifetime, as long as the premiums are paid. Permanent life insurance also accumulates a cash value component over time, which can be accessed or borrowed against by the policyholder.

It's important to note that life insurance policies may have certain exclusions and conditions, such as suicide within a specified period after the policy is purchased.