Was the Parable of the Rich Man and Lazarus a Real Story?
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However, we must understand that this is a parable—"an imaginary story…to illustrate and inculcate some higher spiritual truth" (International Standard Bible Encyclopedia, "parable"). If we take its lesson at face value, it's in complete harmony with the rest of the Bible. Jesus' straightforward point is that it's too late to change one's behavior and character after death. His point is that we must live in a godly manner when we are alive, just as the man Lazarus did in the story.
The New Bible Dictionary is correct when it states that Jesus' story "is a parable which made use of certain Jewish thinking and is not intended to teach anything about the state of the dead" (The New Bible Dictionary p. 388).
One of the most important principles of effective Bible study is that you must derive meanings based upon the greater context of the Bible. Many other scriptures point to the fact that the dead are unconscious, awaiting a resurrection at a later time. Therefore it's clear that this parable was never meant to be taken literally—it's simply a captivating story meant to make a point about repentance and judgment.