What is considered to be the primary reason for buying life insurance?

• A. Build cash value
• B. Provide death benefits
• C. Pay taxes
• D. Fund retirement

Answer: (B)

The key idea is protection for the people who depend on you. The main purpose of buying life insurance is to provide a death benefit to beneficiaries, which replaces lost income and covers ongoing needs after the insured dies—think paying the mortgage, debts, living expenses, and future goals like college tuition.

Other features exist, such as cash value in permanent policies, which can grow and be borrowed against, but that is a secondary benefit and not the primary reason for purchase. Tax advantages of death benefits are a helpful aspect, but the core reason remains financial protection for loved ones. Using life insurance to fund retirement is possible in some cases, but it isn’t the primary purpose and usually isn’t the most efficient retirement strategy.