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.

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