Insurance not only protects your life and limbs but also your wealth. When you begin to build wealth early in life, you only have the human asset, I.e. yourself and your life to depend on. You hope to live to earn an income and build more assets for yourself. Even more if you have a family or dependants.
Insurance is your tool to ensure that the created wealth protects you and your family, should anything happen to the human asset, in which case your insurance proceeds will kick in and make up. That is why the calculation of how much insurance you need considers the income, the spend and the savings. You choose the target you want to set for your desired wealth.