Which option describes Limited Payment Life?

Which option describes Limited Payment Life?

• A. A term policy with level premiums
• B. A universal life policy with flexible premiums
• C. A whole life policy with level face amount and premiums limited to a specific period (20 pay or to age 65)
• D. A whole life policy with increasing face amount

Answer: (C)

Limited Payment Life is a whole life policy in which you pay level premiums for a finite period (such as 20 pay or until age 65), and after that the policy is paid up for life. The death benefit stays level, and cash value continues to accumulate even though no more premiums are due. This gives permanent protection with a finite premium period. It’s not a term policy, which would end after a set term; it’s not a universal life policy with flexible premiums, which allows ongoing adjustments to premium payments; and it’s not a whole life with an increasing death benefit.

Limited Payment Life is a whole life policy in which you pay level premiums for a finite period (such as 20 pay or until age 65), and after that the policy is paid up for life. The death benefit stays level, and cash value continues to accumulate even though no more premiums are due. This gives permanent protection with a finite premium period.

It’s not a term policy, which would end after a set term; it’s not a universal life policy with flexible premiums, which allows ongoing adjustments to premium payments; and it’s not a whole life with an increasing death benefit.