Tennessee Insurance Practice Exam

Which of the following parties typically provides the premium payment in an insurance policy?

1. The insurance company

2. The insured individual

3. The beneficiary

4. The insurance agent

The correct answer is: The insured individual

In an insurance policy, the party that typically provides the premium payment is the insured individual. This person or entity is the one who purchases the insurance coverage and is responsible for making regular premium payments to ensure that the policy remains active. By paying these premiums, the insured gains financial protection against covered risks as outlined in the policy. The insurance company does not provide the premium; rather, it collects the premiums paid by the insured in exchange for the coverage provided. The beneficiary, on the other hand, is the individual or entity designated to receive benefits from the policy in case of a claim, such as after the death of the insured. Lastly, the insurance agent acts as a representative who sells the policy and can help the insured navigate their options, but the agent does not provide the premium payment themselves. Therefore, the correct choice highlights the role of the insured individual in the insurance transaction.