What are the personal uses of life insurance?

Life insurance serves several personal purposes that are crucial for financial planning and security. The correct answer encompasses various important functions of life insurance, specifically survivor protection, estate creation and conservation, cash accumulation, and liquidity.

Survivor protection refers to the primary role of life insurance: providing financial security for dependents in the event of the policyholder's untimely death. This ensures that loved ones can maintain their lifestyle and cover essential expenses such as housing, education, and daily living costs.

Estate creation and conservation involve using life insurance as a means to create an immediate estate for the beneficiaries. The death benefit from a policy can provide funds to cover estate taxes or other expenses that might otherwise deplete the assets left to heirs.

Cash accumulation and liquidity highlight life insurance policies that have a savings or investment component, such as whole or universal life insurance. These policies not only offer a death benefit but also build cash value over time, which policyholders can borrow against or withdraw if needed. This liquidity can be vital in emergencies or for significant financial needs, creating a versatile financial tool.

While investment wealth accumulation and tax-efficient growth are aspects that can be related to certain types of life insurance, the primary goals of survivor protection, estate creation, and liquidity cover a broader