What Does Life Insurance Protect Against? 
Life insurance protects against the economic loss that occurs at the insured 's death . Usually a person 's earned income dies with them . If an insured has people in their life they care about who would be hurt financially , life insurance can mitigate the financial loss . This is also true in the business arena . The death of a key employee may hurt the company he worked for , so key man life insurance protects the company . Business partners may insure each other so that they will have the necessary funds to purchase the deceased partner 's share of the business from the heirs . This protects both the surviving partner as well as the deceased partner 's family . 