The Face Value of an Insurance Policy Is Never Received

question 168

True/False

The face value of an insurance policy is never received by the beneficiary when the interest income settlement option is chosen.

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Definitions:

Interest Rate

The cost of borrowing money or the return on investment for savings, usually expressed as a percentage.

Utility Function

A mathematical representation of how different quantities of goods or services increase a consumer's satisfaction or happiness.

Risk Averse

A description of an individual or entity's preference to avoid risk, choosing certainty over potential higher rewards that come with greater risk.

Profitability

A financial metric indicating the extent to which a person or business generates more revenue than the costs incurred in producing its goods or services.