The death benefit paid to your beneficiary from your life insurance policy can be used for any reason.
Many people buy life insurance to help replace their income if they die. In addition, people use proceeds from life insurance to pay off debt, pay off the mortgage, provide for their child's education, money for retirement, to leave money to charities, etc.
Usually, if you leave the proceeds to an individual the money goes to that person or persons without any federal income tax to pay on the proceeds.
However, if the money is left to an estate, their may be estate taxes to pay on the proceeds from a life insurance policy.
If you have someone who relies on you for financial support you may want to consider buying life insurance to provide financial protection for that person in case you die.
Here's an article explaining why do we need life insurance?