I know car insurance means the government pays the money for your repairs if you have an accident so you don't have to reach into your own account, same with medical insurance in all its forms (dental, etc), but I wonder what life insurance is for. I guess it serves as an inheritance for the relatives (via birth, marriage) of the deceased in the event that person dies and the survivors collect a lot of debt in terms of having to pay for funeral services and their house notes and bills. I don't know. I'm just guessing. I see lots of insurance TV commericals. I'm 24 so I was just a little curious. It seems to me like life insurance advertising is mostly directed toward spouses and parents. That further does make me feel life insurance is kind of an inheritance from the government in case someone dies with dependents so those other relatives under the care of the deceased have money to eat and clothe.
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Car insurance is *not* the government paying the bill. It's the other people who are also insured by the same company who *didn't* have an accident. Ditto for private medical insurance. Life insurance is an option for people who want to leave money. (And no, it doesn't have to be a relative.) Spouses get it for each other and their children because they make financial decisions based on the assumption they will be alive to earn money. Leaving insurance if you die means your spouse can pay the mortgage, buy food and the children can go to college. Life insurance is also sold to parents to cover their children. Those policies are over priced. Great deal for the insurer, lousy deal for the parent.
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