You have children under 18 living in the home. Losing a parent creates immediate financial instability. A life insurance payout gives the surviving parent time — time to grieve, time to adjust finances, and time to make rational housing decisions without foreclosure pressure.
Your mortgage balance exceeds your liquid financial assets. If you have $50,000 in savings and a $400,000 mortgage balance, your estate has no meaningful buffer against the mortgage obligation. Life insurance fills that gap.