What Will Life Insurance Pay For? 
Life insurance proceeds can be used however the beneficiary sees fit . Many people may look to pay off the parent 's outstanding debts -LRB- e.g. mortgage -RRB- and/or their own , invest the money to help for retirement , or simply save it for a rainy day . In short , it 's their money and they can use it however they want - the proceeds are not restricted to any specific type of use . So why do people buy it ? because it creates a ton of cash when the insured dies . People buy life insurance for a number of reasons such as : 1 -RRB- paying off debts upon their death -LRB- e.g. mortgage , cars , credit cards , etc. -RRB- so their family members are n't stuck with the bills 2 -RRB- paying for funeral expenses 3 -RRB- paying estate taxes 4 -RRB- income replacement - providing monies/income for family due to the loss of income from the insured 's work 5 -RRB- leaving a legacy to loved ones Please let me know if I can be of further assistance . Thanks very much . 