Thinking about your own death or the death of a loved one can be a scary prospect, but life insurance can help take some of the economic sting out of a sudden loss. You'll never be able to replace the intangible things a lost loved one brought into your life, but the hard reality is that a spouse or parent may be the only thing separating you from financial turmoil. The purpose of life insurance is to fill in the gap of lost income when a loved one dies.

Covering Burial Expenses

The average cost of a funeral in 2009 was $6,560, according to the National Funeral Directors Association. For many families, coming up with several thousand dollars can be daunting or even impossible. Life insurance ensures that you are reimbursed for funeral and burial expenses, which means you won't permanently lose your savings or struggle to pay bills for months after the death of a loved one.

Maintaining Standard of Living

Many families rely on the income of a primary breadwinner; even in families with two earners, the wages of both may be critical to meeting major expenses. The death of one earner could leave your family struggling to pay the mortgage or even be unable to afford basics such as groceries. Life insurance policies are frequently based upon your current standard of living and are designed to help your family maintain your lifestyle after the loss of income that often comes alongside a tragic death.

Achieving Long-term Goals

Even if your family can survive a sudden loss of income, the death of a provider can make it challenging to save for college, retirement and other long-term goals. Life insurance can provide a cushion that prevents you from abandoning future goals, and some life insurance policies are specifically designed to help parents ensure they have enough money to send their children to college.

Investment Possibilities

Some life insurance policies allow policy holders to cash out their insurance at the end of the life insurance term, or offer permanent life insurance that grows in value over time and can ultimately be cashed in. However, as the University of Missouri Extension notes, other forms of investments may yield a better return.

Choosing a Policy

Not everyone needs a policy that pays hundreds of thousands of dollars, and depending upon your health and income, you might not be eligible for one. A financial planner can help you determine how much the death of a family provider will cost your family, and can advise as to the right policy. When you consider policies, take into account not only your current income, but potential future income, goals for your children and family, the costs of a burial and any other costs your family might incur.