Insurance Broker Certification Practice Exam

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Study for the Insurance Broker Certification Exam. Prepare effectively with flashcards and multiple choice questions. Each question comes complete with hints and explanations. Ensure you're ready to excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the primary source of funding for government insurance programs?

Private investor capital
Policyholder premiums
Tax revenue
Stockholder dividends

The correct answer is: Tax revenue

The primary source of funding for government insurance programs is tax revenue. This is because government insurance programs, such as Medicare or Social Security, are typically financed through taxes collected from the public. These programs are designed to provide essential services to citizens, and the funding mechanism relies on contributions from taxpayers rather than profits generated from private investors or policyholder premiums. Taxes allocated for these programs help ensure that coverage and benefits remain accessible to all eligible individuals, reflecting the government’s role in providing social safety nets. In contrast, private investor capital, policyholder premiums, and stockholder dividends pertain more to privately-run insurance companies, where funding mechanisms are typically profit-driven and reliant on the business model of collecting premiums in exchange for coverage.