The family lost a wage earner (they may not have needed the money while the mother was alive). And now they will have additional expenses (like child care - when the wife would have been home).

This raises the issue of how important life insurance can be. rabbonim should encourage all young couples to purchase a policy.

maybe in this specific case. I do not know the family nor their situation.
In many of the instances (i.e. from the fliers), the person who passed is hailed as someone who sat in kollel and dedicated his life to learning. In most of those situations, he was not earning an income that is being lost.

Even if the person who passed away was not a wage earner, they certainly contribute to the financial stability of the family. A single parent family vs. a single income family are two different worlds.

The mother passed away. I heard that she was the breadwinner, while the surviving husband was learning in Kollel. Thus, the need to raise funds.

Rafi,
I number of years ago I bought life insurance for 2 million shekels, and I asked the agent: “Look, my income is nowhere near that and we don’t even make expenses, so what’s the point of being worth more when I’m dead that alive?” She replied, rather wisely, I think: “When you’re alive you’ll run around to gemachim and do whatever humanly possible to support your family and marry off your children. But if you’re gone, who’s going to do that?”
As long as the spouse is alive, he/she will do everything to keep the home afloat. Once they’re gone, all that is lost. Not only that, but the remaining spouse is emotionally broken and needs help just to maintain where they were before the loss. So it makes sense that although the family had a hard time before the death, they could at least cope. Now it’s much more difficult.

Rafi,

I know this family personally; the mother was a teacher and was the primary earner (I know that the father is a Sofer, but I don't know what he earns as). I agree with your general comments, but it does not apply in this particular case.

I know the family. The father works as a sofer and a little bit in a yeshiva, but doesn't manage to make very much. They have 10 children. The mother worked in a school and was the primary earner.
I think that before the death they were struggling a bit, but not enough to have to ask for help. Now they are.
I think they daven in R. Soloveichik's shul.
I don't know their life insurance situation, but I imagine that they would have had trouble affording it.

don't think I am questioning whether they really need help or not. I did not know them, but I know many of the people collecting for them and they are completely honest people with no ulterior motives. If they say they need help, I trust them.

My question was more general, and just prompted by the recent collection.