Primerica Life Producer Practice Test

Which of the following benefits comes from having life insurance?

1. It can act as a savings account

2. It provides cash upon death to beneficiaries

3. It guarantees investment returns

4. It allows unlimited contribution amounts

The correct answer is: It provides cash upon death to beneficiaries

The benefit of life insurance primarily lies in its ability to provide financial security to beneficiaries in the event of the policyholder's death. This ensures that loved ones are supported financially after the loss of the primary income earner or caregiver. The cash benefit, also known as the death benefit, is typically paid out as a tax-free lump sum, allowing family members to cover expenses such as mortgage payments, education costs, and other living expenses that may arise. While other options may present appealing features, they do not accurately represent the primary function of life insurance. For example, while some life insurance policies may have a savings component or investment options, these are not the core purpose of life insurance. Thus, the most definitive benefit highlighted in the context of life insurance is the provision of cash upon death to beneficiaries.