To ensure continuity of income
Say that your income is used to support yourself and your family. When the time comes and your paychecks stop, the life insurance proceeds can be used to continue to support the family members you’ve left behind.

To pay off any debts left behind
Home loans, car loans, medical bills, and credit card debts are often left unpaid when someone dies. These obligations must be paid from the assets left behind. This can deplete the resources that your family needs. Life insurance can be used to pay off these debts, leaving your other assets intact for your family to use.

To provide liquidity to one’s assets
When one dies, one may leave some liquid assets (such as cash, CDs, and savings bonds), and some illiquid assets (such as real estate, an automobile, and stocks). The illiquid assets may have to be sold in order to meet these obligations when they come due. This may cause a financial loss if the assets must be sold cheaply in order to get the money on time. Life insurance can avert this situation, because the proceeds are available almost immediately upon the death of the insured.

To create an asset for one’s heirs
After the debts and expenses are paid, there may not be much left over for the family. Life insurance can automatically provide assets for them after the death of the insured.

A great investment vehicle.
Some types of life insurance policies may actually make money for you, as well as provide the benefits described above. This can help with long-term financial goals.