Washington Life Producer Practice Exam

What is one of the primary functions of life insurance in financial planning?

1. To provide investment opportunities

2. To secure funds for dependents after the policyholder's death

3. To save for retirement

4. To accumulate cash value for later needs

The correct answer is: To secure funds for dependents after the policyholder's death

One of the primary functions of life insurance in financial planning is to secure funds for dependents after the policyholder's death. This aspect of life insurance is crucial because it provides financial protection and support for the policyholder's beneficiaries during a potentially challenging time. In the event of the insured's passing, the death benefit paid out by the policy can help cover immediate expenses, such as funeral costs, outstanding debts, and ongoing living expenses for dependents. This ensures that loved ones maintain their standard of living and financial stability in the absence of the policyholder's income. While other options like saving for retirement or investment opportunities can be related to financial planning, they do not represent the primary function of life insurance, which centers on providing security and peace of mind to families.