Question 4019 of 303 · California Life-Only Agent Exam
What is the main purpose of an insurance premium?
Exactly one answer is correct.
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Correct answer to question 4019
- D: To pay for coverage and to build reserves from which claims are paid
Explanation
Premiums are based on mortality, expenses, and investment earnings and fund the insurer's obligations.
More questions: Life Insurance Basics
- 4020Which of the following is a component of a life insurance premium?
- 4021A person's family needs a monthly income during the children's school years, then a smaller one later. Which life insurance need does this describe?
- 4022Which of the following is NOT a method of managing risk?
- 4023When the death benefit is paid to a beneficiary, which party is the person who named the beneficiary?
- 4024A husband buys a policy on his wife's life and names himself as beneficiary. Who is the policy owner?
- 4025Which of the following best describes an insurer's mortality assumption?