People need life insurance to financially protect their loved ones in the event of their death. Life insurance provides a lump sum payment, known as the death benefit, to beneficiaries named in the policy. This financial safety net helps cover expenses such as funeral costs, outstanding debts, mortgage payments, and daily living expenses. Additionally, life insurance can be a crucial tool for income replacement, ensuring that dependents have financial support to maintain their lifestyle and meet long-term goals. It offers peace of mind by mitigating the financial impact of the policyholder's death and can serve as a crucial component of overall financial planning.