Question

What is the primary purpose of distributing surplus in the context of life insurance?

a.

To reduce policyholders' benefits

b.

To increase the company's profits

c.

To provide additional benefits to policyholders and shareholders

d.

To minimize the liabilities of the insurance company

Posted under IC38 Life Insurance Agent Exam

Answer: (c).To provide additional benefits to policyholders and shareholders Explanation:The distribution of surplus in life insurance is primarily done to provide additional benefits to policyholders and, if applicable, shareholders of the company.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the primary purpose of distributing surplus in the context of life insurance?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is the most common type of bonus in life insurance that is received only at the time of a claim by death or maturity?

View solution

Q. What is a "Terminal Bonus" in the context of life insurance?

View solution

Q. How is the Compound Bonus expressed in life insurance?

View solution

Q. Which method of surplus distribution is adopted in North America, where surplus is declared and distributed as dividends?

View solution

Q. How are dividends typically distributed in the Contribution Method?

View solution

Q. What is the primary focus of Unit Linked Policies in life insurance?

View solution

Q. Which method of surplus distribution is more commonly used in North America?

View solution

Q. In the context of insurance, what does the term "premium" refer to?

View solution

Q. Which of the following factors is not considered in the process of setting the premium for life insurance policies?

View solution

Q. What is the Gross premium in the context of life insurance?

View solution

Q. What does a "lapse" mean in the context of insurance?

View solution

Q. What is the primary reason for the emergence of surplus in the context of life insurance?

View solution

Q. How can surplus be allocated in the life insurance industry?

View solution

Q. What is the most common form of bonus in life insurance?

View solution
View All MCQs on IC38 Life Insurance Agent Exam

Recommended Subjects

Are you eager to expand your knowledge beyond IC38 Life Insurance Agent Exam? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Engineering Materials

Discover the building blocks of engineering with our Engineering Materials category....

Human and Cultural Diversity

Explore the rich tapestry of human societies with our Human and Cultural Diversity...

Engineering Geology

Explore the dynamic field of Engineering Geology with our specialized category. Delve...

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...

Heat Transfer

Explore the fascinating world of heat transfer with our Heat Transfer category....

Renewable Energy

Explore the sustainable future of energy with our Renewable Energy category. Dive...

Drug and Pharmaceutical Biotechnology

Navigate the world of pharmaceuticals and biotechnology with our dedicated category....

Microbiology

Uncover the fascinating world of microbes with our Microbiology category. Delve into...

Non Verbal Reasoning

Enhance your cognitive abilities with our Non-Verbal Reasoning category. Dive into...