<prompt> Human: a lot of people in my community are tricked into buying it and my parents are trying to make me buy it too but I really dont see any benefits from what Ive been told. I just want a better idea  <response>: Life insurance is designed to deal with the fact that there is a very low risk that any given youngish person will die in a given year, but if they do die it can be devastating for those that they leave behind such as spouses and kids. Insurance companies act as a pooling mechanism so that you can pay a relatively small amount of money for protection against the low risk bad event happening to you during a given time. i.e. you die within a year.So as an example, according to the Social Security table if you have 98,043 25 year old men 97,909 of them will live to be 26. 134 will die. If all of those men put 100 into a pot for the year then the family of every man who died would get 73,000. 100 isnt a big cost for most people and 73,000 would mean a lot to a family who just lost dad. In essence, insurance companies act as that pot. There are obviously many more complicated aspects, but conceptually this is what is going on.However, that doesnt mean that insurance is for everyone or that all insurance contracts are a good thing. Maybe you dont need insurance. If you have no kids, no wife and spend all day in your parents basement playing Xbox then nobody is going to be in dire financial straights if you die. Maybe you dont need life insurance. On the other hand, if you are a single dad supporting three kids then your death could be devastating for the kids. In that case, you probably do need some life insurance to protect them unless you have some other financial resources set aside. Also, not all companies run their operation well. They may take too much as profits, invest it poorly, run inefficiently or even be outright scams. Insurance isnt good or bad, rather it is a potentially useful tool for someone to pay a small amount of money to offload a low probability risk to someone else. 