New York State Life Insurance Exam Questions Practice Question
Which type of insurance policy is characterized by premiums that are fully paid up within a stated period, after which no further premiums are REQUIRED?
Correct Answer: D
Rationale: Limited payment life insurance is designed so that premiums are fully paid within a specified timeframe, after which no further payments are necessary. This structure allows policyholders to secure lifelong coverage without ongoing financial commitments.
Option A, lump sum insurance, typically refers to a one-time payment for coverage, lacking the periodic premium feature. Option B, basic installment insurance, involves regular payment schedules without a predetermined end to premium payments. Option C, prepaid premium insurance, suggests that premiums are paid in advance but does not guarantee that no further payments are required after a certain period. Thus, only limited payment life insurance meets the criteria outlined in the question.
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