Life insurance essentially “risk pooling”.  Today, when something insured is destroyed or lost, such as a car, house or human life, your insurance company should pay you the value of that economic benefit to help compensate you for your loss.  Even though life insurance can’t replace your loved on who has died, the money that you receive can ease the economic hardship of your loss, rather directly or indirectly.  Just as only a very small amount of buildings burn down to the ground in a year, only a relatively small percentage of individuals will die during a given year - statistically speaking.  Actuaries for insurance companies have developed actuarial systems over the years that predict the changes of such loss occurring. Although actuarial systems cannot foresee when a person will suffer a loss, they can predict with extra-ordinary accuracy how often a loss will occur.  This enables our society to pool, or share risk of loss.  Essentially, if each person contributes a fair and small amount every year - the total of those contributions are deposited into a reserve fund from which a few individuals who have lost loved ones can be reimbursed.