Anyone who has a desire or need for immediate, tax-free cash should have life insurance. It either creates an estate or protects an estate.
Is it to say that if someone buys a life insurance policy they have automatic, immediate access to tax-free cash?
It's possible but unlikely.
If someone buys a true life insurance policy, which means the first premium has been paid and the policy has been issued or they are covered by the temporary agreement that's offered by most companies, then unexpectedly dies the same day and no fraud is involved or suspected , the beneficiary (ies) is / are immediately entitled to a tax-free death benefit. A certified death certificate is required to initiate the death benefit claim.
If the policy is an accidental death policy and the insured person dies as a result of anything other than an accident, for instance a sudden heart attack or brain aneurysm the death benefit will not be paid. However, if death occurred as the result of an accident, the death benefit would be paid.
It's rare for someone to die immediately following the purchase of a life insurance policy, although sadly, there are people who believe buying a policy will cause death to come knocking. Everyone is entitled to an opinion or belief.
If someone buys a permanent life insurance policy, unless they purchase a single premium whole life (SPWL) policy, it will probably take time before there is cash value that can be accessed. It's not magic. It depends on how much was put in the policy and the type of policy. Whatever cash value is available can be accessed at any time, even while still alive.
It should be obvious why most people should have a life insurance policy for its death benefit. The reality is there are a lot of people who either believe they don't need it or don't want it. They either don't realize the need or aren't willing to admit it. Worse, there are those who do realize the need, do admit it but do nothing about it. It's one of those things they plan to get to someday but someday never comes. Then a sudden death occurs and there's a major financial burden. Either that or death is imminent but they cannot get it because they don't qualify.
It beats having to take up a collection to pay expenses.
When someone dies, there are a lot of things that need to be taken care of. Most often, little or none have been taken care of. At that point, who's going to say, "I really don't need this death benefit check"?
What if someone has a lot of money?
Perhaps the need is not as great in that case, but unless that person has done some careful estate planning, they will have estate taxes to deal with. Life insurance can be used to pay estate taxes and / or keep the estate from having to liquidate assets.