Primerica Life Producer Practice Test

What is a primary duty of the insurer under a life insurance policy?

1. To invest premium funds wisely

2. To pay benefits upon the insured's death

3. To market the policy effectively

4. To provide customer service

The correct answer is: To pay benefits upon the insured's death

The primary duty of the insurer under a life insurance policy is to pay benefits upon the insured's death. This obligation is the cornerstone of life insurance contracts, as policyholders enter into such agreements with the expectation that their beneficiaries will receive financial support in the event of their passing. When a life insurance policy is issued, the insurer evaluates the risk associated with providing coverage and agrees to indemnify the beneficiary in exchange for premium payments. This payment serves as a promise that, upon the insured’s death, the insurer will fulfill its contractual obligation by disbursing the agreed-upon death benefit. This fundamental responsibility establishes the core function of life insurance and underscores the importance of trust in the relationship between the insurer and the policyholder. While the other options, such as investing premium funds wisely, marketing the policy effectively, and providing customer service, are important functions of an insurance company, they are secondary to the primary duty of delivering the promised death benefit to beneficiaries.