Life insurance provides a cash payout, or death benefit, to your beneficiary when you die. This money can be used for a variety of purposes, depending on the specific needs of your loved ones. The life insurance death benefit can be used to replace lost income for your family (especially if you were the primary wage-earner), to cover final expenses like funeral costs and medical bills, to pay the mortgage or credit card bills, fund a college education or pay for your family’s daily living expenses like groceries and gas.