One possibility: There is a G-d, or god equivalent, but our human understanding of G-d is based on our own wishful thinking, not on what G-d is actually like.

We may think of our Creator as being all-powerful, all-wise, and all-good, but maybe our Creator is really just an ordinary fallible bonehead in a universe that happens to be a trillion trillion times bigger than our universe. That fact that we want G-d to be perfect, and can conceive of G-d being perfect, does not actually mean that G-d is perfect.

Or, maybe G-d does exist and is all-powerful, all-knowing and perfectly good, but what we think of as life is simply an educational simulation. Maybe the anxiety and the terror are just part of the educational experience