What is it, though? It is, quite simply, insurace on your life. In the same way you have Collision Insurance on your Automobile in case anything happens to it, you can put insurance on your life in case anything happens to it.
By 'happens' I mean, of course, you happen to 'lose it'.
So, if you have life insurace, and your life ends, you get money? No, of course not (unless you're crooked), that would be too easy, you stiff! No, if you die, your life insurace goes to whomever you said it should go to when you took out the policy, usually a spouse or children.
The idea on "money upon death" was originaly put forth to pay for burial expenses (assuming you weren't simply going to dumped in the Thames). It has, however, evolved into much larger sums that are intended, in the case of the primary breadwinner taking a dive, you sustain the family until another source of income can be found.