QQuestionAmerican College Testing
QuestionAmerican College Testing
Question 5
Dividends payable to a policyowner are:
A. guaranteed
B. declared by the State
C. declared by the insurance company
D. strictly regulated
Select the correct answer.
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Answer
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Step 2: Understanding Dividends in Insurance
Dividends in an insurance policy are payments made to policyowners from the insurance company's profits. These are not guaranteed payments but are discretionary.
Final Answer
Dividends payable to a policyowner are declared by the insurance company. The key point is that dividend payments are at the insurance company's discretion and are not guaranteed or state-mandated.
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