The correct answer is C. Limited Pay Life. Limited Pay Life insurance is a type of whole life insurance policy that covers an insured person’s entire life, but the premiums are paid over a limited or fixed period, after which the policy is considered fully paid up. Let’s delve into why Limited Pay Life is the correct answer and why the other options are not:

C. Limited Pay Life:

Limited Pay Life insurance is a whole life insurance policy that provides coverage for the entire lifetime of the insured person. What distinguishes it from traditional whole life insurance is that the premiums are paid over a limited period, often a set number of years or until a specific age.

Once the premiums are fully paid, the policy is considered “paid up,” and the insured continues to have coverage without the obligation to make further premium payments.

Limited Pay Life offers several advantages. Firstly, it provides lifelong coverage, which means that the policyholder’s beneficiaries will receive a death benefit when the insured person passes away. Secondly, by paying premiums over a shorter period, policyholders can often enjoy lower total premiums compared to paying premiums throughout their lifetime.

This can make it an attractive option for individuals who want to ensure their loved ones have financial protection in the event of their death but prefer to pay off the policy within a specific time frame.

Now, let’s discuss why the other options are not correct:

A. Adjustable Life:

Adjustable Life insurance is a flexible type of life insurance that allows policyholders to adjust the premium payments, death benefit, and other policy features. Policyholders can modify their coverage as their needs change over time.

While Adjustable Life provides flexibility, it does not necessarily specify that premiums will be paid over a limited time frame. Instead, it allows for ongoing adjustments to the policy’s terms.

B. Renewable Term:

Renewable Term insurance is a type of term life insurance that offers coverage for a specified term, typically one, five, ten, or twenty years. It is renewable at the end of each term, with the premiums typically increasing as the insured person gets older.

Unlike Limited Pay Life, Renewable Term policies do not provide lifelong coverage, and they do not have level premiums paid over a limited time. Premiums often increase upon renewal.

D. Joint Life:

Joint Life insurance, often referred to as joint and survivor life insurance, is a policy that covers two individuals, such as spouses or business partners. It pays out a death benefit when the first insured individual passes away, and the policy continues to cover the surviving individual.

Joint Life insurance is not specifically associated with level premiums paid over a limited time; instead, it is characterized by its coverage of multiple individuals.

In summary, Limited Pay Life insurance is the correct answer because it is a whole life insurance policy that provides lifelong coverage with level premiums paid over a limited or fixed period.

This feature allows policyholders to pay off the policy within a specific time frame, after which the coverage continues without further premium payments. The other options—Adjustable Life, Renewable Term, and Joint Life—do not inherently have the combination of features that Limited Pay Life offers, making them the incorrect choices for this type of policy.