Primerica Life Producer Practice Test

What is the primary purpose of life insurance policies?

1. To provide investment opportunities

2. To cover funeral expenses only

3. To protect against financial loss upon death

4. To ensure long-term savings

The correct answer is: To protect against financial loss upon death

The primary purpose of life insurance policies is to protect against financial loss upon death. When an individual passes away, their death can create a significant financial burden for their dependents or beneficiaries. Life insurance provides a death benefit that can replace lost income, cover outstanding debts, and help ensure that loved ones maintain their standard of living. While investment opportunities, funeral expenses, and long-term savings can be associated with life insurance products (particularly with certain types of policies like whole life or universal life), they do not encompass the primary intention behind life insurance. The central aim is to provide a safety net and financial security for beneficiaries in the event of the policyholder's death. This focus on financial protection is crucial for individuals seeking to safeguard their family's future against unforeseen circumstances.