Insurance Broker Certification Practice Exam 2025 – All-in-One Study Resource

Question: 1 / 400

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

Private investor capital

Policyholder premiums

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.

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Stockholder dividends

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