PSI Ohio Insurance Practice Exam

What is the primary focus of traditional life insurance products?

1. Investment growth

2. Compensation for accidental death

3. Providing a death benefit to beneficiaries

4. Covering long-term care expenses

The correct answer is: Providing a death benefit to beneficiaries

The primary focus of traditional life insurance products is to provide a death benefit to beneficiaries. This type of insurance is designed to ensure financial support for dependents or beneficiaries in the event of the policyholder's death. The death benefit serves as a way to replace lost income, cover outstanding debts, or fund future expenses such as education costs for children. While some life insurance products may offer components related to investment growth or combinations with health-related coverages, traditional life insurance specifically emphasizes the promise of providing a monetary payout upon the death of the insured individual. This straightforward intent makes it a foundational element of financial planning for many individuals, particularly those with dependents who rely on their income for support.