I believe the major reason people file for LS is that insurance coverage can continue for a spouse. As people age/are ill, this is vital (one may be uninsurable).
Some people also, for religious purposes, will not divorce, but will agree to a LS.
A LS can do everything a divorce can do - divide property, debts, custody and support orders, etc. The one difference is the STATUS of marriage is never dissolved.
It also allows each spouse to cover the other for insurance, and maintain other benefits as the 'spouse'.