71. Upon the death of an insured individual, what does life insurance guarantee to deliver to the beneficiary?
Answer: C
A life insurance policy guarantees to deliver a specified sum of money to the beneficiary upon the death of the insured individual.
Life insurance provides a financial benefit to the beneficiary in the form of a predetermined amount of money, ensuring that the insured individual's financial obligations and legacy are addressed after their passing.
A) An annuity.
An annuity is a financial product that provides regular payments over time, typically after retirement. Life insurance does not guarantee an annuity, as its primary function is to deliver a lump sum payment upon the death of the insured.
B) A dividend.
Dividends are payments made to policyholders of certain types of life insurance, representing a share of the insurer's profits. However, life insurance itself does not guarantee dividends; instead, it guarantees a specific payout to beneficiaries upon the insured's death.
C) A specified sum of money.
This option is correct because life insurance policies are designed to provide a guaranteed payout, known as the death benefit, which is a specified sum of money paid to the beneficiary upon the death of the insured individual.
D) A final expense fund.
A final expense fund typically refers to money set aside specifically for funeral and other end-of-life costs. While life insurance can help cover these expenses, it does not specifically guarantee a fund for final expenses; rather, it guarantees a specified sum of money.
Conclusion
The core function of life insurance is to provide financial security to beneficiaries through a specified sum of money upon the death of the insured. Options A, B, and D do not align with the fundamental purpose of life insurance, which is to deliver a guaranteed payout, making option C the definitive correct choice.