The greatest wealth on the earth is nothing but the peace of mind. There is no human being who does not have fears and worries on his mind. Perhaps this is the reason that the Holy Quran mentions at some places that the greatest reward in this life and the hereafter is the “relief from worries and fears”. The psychiatrists too agree that fears and worries are most inimical to the mind as well as the body. Most of us are always obsessed with the worries about our family and livelihood. The imminent risks on the minds are death, accident, riots, bomb blasts, spreading of any viral disease like chicken gunia, cholera, plague, etc.; natural calamities like Tsunami, draught, earthquakes or loss of employment, bankruptcy, theft and robbery, etc. Worst of the worries is “What will happen to my family if I die?”
As a Muslim, first of all, we must rely on Allah’s will and our destiny or divine preordainment in all circumstances. Allah, the Almighty will definitely create ways and means to cater all necessary things to our family after we will leave this world. The suffering of family will be a test from Allah in order to judge their faith and trust and to reward them with materialistic benefits.
How will you answer back to Allah, about these verses of the Holy Quran?

إِنَّ اللّهَ كَانَ عَلَيْكُمْ رَقِيبًا
سوره النساء:4 , آيت:1 , جزء من الآية

Surely, Allah is Ever an All-Watcher over you
(Chapter 4: An-Nisa, part of verse 1.)

أَلَمْ يَجِدْكَ يَتِيمًا فَآوَى
وَوَجَدَكَ ضَالاًّ فَهَدَى
وَوَجَدَكَ عَائِلاً فَأَغْنَى
سوره الضُّحى:93 , آيت:6-7-8

Did He not find you (O Muhammed!) an orphan and gave you a refuge? (6) And He found you unaware (of the Quran, its legal laws and Prophethood) and guided you? (7) And He found you poor and made you rich (self-sufficient with self-contentment)?
(Chapter 93: Ad-Duha).

No one can deny the importance of life-insurance or earning money to support family; however, as a pious and strong Muslim we must always rely on Allah that will keep us away from fears including sudden death, worries, etc. Every Muslim believes that:

كُلُّ نَفْسٍ ذَآئِقَةُ الْمَوْتِ
سوره آل عمران:3 , آيت:185 , جزء من الآية

“Everyone shall taste death”

And that can happen anytime, anywhere. If our faith in Allah is firm, our supplication (Du’a) for the family to become self-sufficient even after our death will be accepted within no time. And Allah will create invisible honest ways of earning sufficient money but we have to work hard as Allah Said:

فَانتَشِرُوا فِي الأَرْضِ وَابْتَغُوا مِن فَضْلِ اللَّهِ
سوره الجمعة:62 , آيت:10 , جزء من الآية

“You may disperse through the land, and seek the Bounty of Allah (by working)”
(Chapter 62: part of Verse 10).

The other way of earning money by investment to safeguard the family may be life insurance and you are free to act as per your level of Shariah knowledge and wisdom. Allah has given the knowledge of Divine Law in the form of Holy Quran and Sunnah of Prophet Mohammad and released the Mankind to act as per his wisdom. However, you have to respond to Allah as He said :

وَلَقَدْ أَضَلَّ مِنكُمْ جِبِلاًّ كَثِيرًا أَفَلَمْ تَكُونُوا تَعْقِلُون
سوره يس:36 , آيت:62

And indeed he (Satan) did lead astray a great multitude of you.
Did you not, then, understand?
(Chapter 36, Verse 62)

In brief, if one lives with the firm belief that whatever good or bad befalls on him is a destiny from Allah, his efforts of protecting his family by buying properties, saving accounts, life insurance etc will compliment his faith in Allah. If his belief is purely in the materialistic things like properties, savings or life insurance etc. then there is no doubt that such efforts are morally as well as Islamically not acceptable.

Life insurance reduces these fears to a great extent and relaxes the mind with a satisfaction. An insured person does not get horrible dreams of his children begging for help from their uncles and aunts in case of his death. This is in accordance with the Hadith, the Prophet Mohammad(ﷺ) said:

“It is better to leave your heirs rich than to leave them poor and needy asking others for help”

It does not mean that life insurance is an only source to safeguard the heirs. There are many ways to leave your heirs rich such as rental properties, family business, educated children, bank deposit, etc. but none of them is as easy, economical and guaranteed as the life insurance.