What is the primary risk covered by life insurance?

Life insurance primarily covers the financial loss that occurs due to premature death. The central purpose of life insurance is to provide financial security and peace of mind to the insured’s beneficiaries in the event of the insured's untimely passing. This coverage helps to ensure that dependents or loved ones can maintain their standard of living, pay for necessary expenses, or cover debts and obligations without the income that the deceased would have provided.

In the context of life insurance, "premature death" typically means passing away before reaching a certain age or before one's natural life expectancy, which can leave survivors in a vulnerable financial position. The death benefit paid out under a life insurance policy helps mitigate this risk by offering a financial safety net, thus underscoring the essential function of life insurance in risk management.

While loss of income due to disability and other financial risks are important matters, they are generally covered under different types of insurance policies, such as disability or property insurance. Life insurance distinctly focuses on the financial implications of death rather than loss of income due to disability or risks associated with property or investments.