West Virginia State Life Insurance Practice Exam

Social Security benefits are designed primarily for which purpose?

1. Luxury investments

2. Supplemental retirement income

3. Unemployment insurance

4. Short-term loans

The correct answer is: Supplemental retirement income

Social Security benefits are primarily designed as supplemental retirement income. This system provides financial support to individuals once they reach retirement age, helping to ensure that they have a source of income in their later years. The reliance on Social Security as a foundational element of retirement planning underscores its purpose to assist individuals in maintaining a standard of living during retirement when they are no longer earning a regular income from employment. While Social Security may also provide benefits for disability, survivors, and certain dependents, its main function is to replace a portion of the income lost when an individual retires. This income is intended to assist with basic living expenses, thereby acting as a safety net for retirees. Other options, such as luxury investments, unemployment insurance, and short-term loans, do not align with the intended purpose of Social Security benefits, which focus primarily on ensuring financial stability for individuals after they have contributed to the system throughout their working lives.