Pennsylvania Life and Health Insurance Exam Practice Question
If a policyowner chooses to pay premiums for a specified number of years, this permanent life insurance policy is referred to as:
Correct Answer: C
Rationale: A limited payment policy allows the policyowner to pay premiums for a specified number of years while maintaining permanent coverage. This structure ensures that the policy is paid up after the chosen premium payment period, providing lifelong protection.
Option A, a whole life policy, typically requires premiums to be paid throughout the policyowner's life, lacking the defined payment period. Option B, an endowment policy, focuses on providing a payout after a specific term or at a certain age, rather than on premium payment duration. Option D, a term policy, offers coverage for a limited time with no cash value, not aligning with the concept of permanent insurance.
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