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LLQP (Life Licence Qualification Program) Practice Exam · Question

A life insurance company that issues participating policies, where policyholders may receive dividends, and is owned by its policyholders, is best categorized as what type of insurer?

A mutual insurance company is owned by its policyholders, who receive any profits in the form of dividends. This contrasts with stock companies, which are owned

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Question: A life insurance company that issues participating policies, where policyholders may receive dividends, and is owned by its policyholders, is best categorized as what type of insurer?

Answer options: ✅ Mutual company

  • Stock company
  • Fraternal benefit society
  • Reinsurer

Correct answer: Mutual company

Explanation: A mutual insurance company is owned by its policyholders, who receive any profits in the form of dividends. This contrasts with stock companies, which are owned by shareholders.

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