Digital Court Reporting Practice Exam

Which of the following best describes Limited-Pay Whole Life insurance?

Premiums are paid for the insured's entire life, but coverage ends at a specified age. Premiums are paid only for a specified period (e.g., 10, 20 years, or until age 65), but coverage remains in force for the insured's entire life. It offers increasing premiums and a decreasing death benefit. It is a type of term life insurance with a cash value component.

Correct Answer:

Premiums are paid only for a specified period (e.g., 10, 20 years, or until age 65), but coverage remains in force for the insured's entire life.

Explanation:

Limited-Pay Whole Life insurance is a type of whole life policy where premiums are paid for a predetermined, shorter period (such as 10, 15, or 20 years, or until a certain age like 65). Despite the limited payment period, the coverage itself remains active for the insured's entire life.

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