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AssignmentMultiple Choice

Buying Insurance

Question 1 • OK-Personal Financial Literacy S1 – EDGNTY-83861 26-27

What is the main purpose of life insurance?

Answer
A
to invest in the stock market and mutual funds
B
to pay for the policyholder's medical expenses
C
to create a long-term savings account for the policyholder
D
to provide money to beneficiaries after the policyholder’s death

Explanation

Life insurance is designed to provide financial support to the people named as beneficiaries if the policyholder dies. The death benefit can help beneficiaries cover expenses or replace lost income. Paying the policyholder’s medical bills or creating savings is not the main purpose of life insurance.

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