Final answer:
The correct answer is d. to pay for short-term care in a hospital following surgery, as this is typically covered by health insurance, not life insurance. The primary purposes of life insurance include providing financial protection for dependents, serving as a savings plan, and preventing economic loss associated with death.
Step-by-step explanation:
The question asks which of the following is not a purpose of life insurance:
- a. to assist dependents in the event of a breadwinner's death
- b. to potentially act as part of a savings and investment plan
- c. to reduce or prevent economic loss associated with death
- d. to pay for short-term care in a hospital following surgery
The correct answer is d. to pay for short-term care in a hospital following surgery. The main purposes of life insurance are to provide financial protection to survivors (a), potentially serve as a savings and investment plan (b), and mitigate financial losses associated with death (c). Paying for short-term hospital care after surgery, however, is a function typically associated with health insurance, which is intended to cover medical expenses.
Life insurance companies, after policies are paid out, have substantial funds available to lend out or for policyholders to borrow against, with interest payments on loans owed back to the company.