Alice sends Bob 1 ETH. Bob happily receives ETH, but then loses his mobile phone where Bob has his wallet stored. He worries his precious money is lost. Is he right? No, because before creating the wallet, he has noted down the seed phrase. Bob downloads the wallet software on his new mobile phone and then imports his seed phrase. Voilà, he still has access to his funds. Remember: As long as you have the seed phrase, you can always generate the public/private keys associated with your funds, you won't lose your money. You can even have your wallet on multiple computers. This is because the record of your funds is kept on the blockchain, not in your wallet, your wallet gives you access, it doesn't store your funds, much like a key to a safe.