What is the primary reason for purchasing life insurance rather than annuities?

The primary reason for purchasing life insurance rather than annuities is to create an estate. Life insurance serves primarily as a financial safety net for beneficiaries upon the death of the policyholder. In essence, it provides a lump sum of money to the designated beneficiaries, ensuring they are financially protected after the policyholder's passing. This creation of an estate can be crucial for individuals looking to leave a legacy or provide for loved ones, covering expenses such as mortgages, education costs, or other financial obligations.

Annuities, on the other hand, are designed to provide a stream of income during a person's lifetime or over a specified period. Their primary purpose is to liquidate a sum of money gradually, not to create a financial legacy or estate for others. Hence, while both financial products serve important roles in financial planning, life insurance distinctly focuses on estate creation and ensuring financial support for heirs.