The correct answer is “Life Paid-Up at Age 70.”

A Limited-Pay Life policy, also known as Limited-Premium Life, is a type of life insurance policy where the policyholder makes premium payments for a set number of years, after which the policy remains in force for the lifetime of the insured individual without any further premium payments.

Let’s explore why “Life Paid-Up at Age 70” is considered a Limited-Pay Life policy and why the other options do not meet this definition.

Why the correct answer is “Life Paid-Up at Age 70”:

“Life Paid-Up at Age 70” is a Limited-Pay Life policy because it is designed for the policyholder to make premium payments for a specified duration, in this case, up to age 70. Once the policyholder has completed the premium payments as specified, the policy becomes “paid-up,” which means it remains in force without requiring any additional premiums.

This type of policy allows the insured individual to have life insurance coverage for their entire lifetime without the burden of ongoing premium payments after a certain age or a predetermined number of years.

Here’s why “Life Paid-Up at Age 70” qualifies as a Limited-Pay Life policy:

1. Limited Premium Payment Period:

The defining characteristic of a Limited-Pay Life policy is that the policyholder pays premiums for a limited or specified number of years. In this case, the premium payments are made up to age 70. Once these payments are completed, the policy becomes “paid-up,” and the coverage continues for the lifetime of the insured individual.

2. Lifetime Coverage:

The policyholder in “Life Paid-Up at Age 70” can enjoy the benefit of lifetime coverage without having to make premium payments beyond the age of 70. This feature aligns with the concept of Limited-Pay Life policies, where the goal is to limit the period of premium payments while ensuring that the coverage remains in force for the insured’s entire life.

Why the other options are not correct:

10-year Renewable and Convertible Term:

This type of policy is a term life insurance policy that can be renewed and converted into a permanent policy at the end of each term (usually in 10-year increments).

It is not a Limited-Pay Life policy because it does not have a limited premium payment period. Term life policies are typically characterized by lower premiums but do not build cash value, and they require ongoing premium payments to maintain coverage.

Straight Whole Life:

Straight Whole Life, also known as Ordinary Whole Life, is a traditional type of whole life insurance policy where premium payments continue throughout the lifetime of the insured individual. There is no specified premium payment period, so it does not fit the definition of a Limited-Pay Life policy. Premiums for straight whole life policies are often paid for the entire life of the policyholder.

Renewable Term to Age 100:

This option is a term life insurance policy that can be renewed up to age 100. While it provides coverage up to a later age, it is still a term life policy with ongoing premium payments. It does not meet the criteria of a Limited-Pay Life policy because there is no specified premium payment period, and it lacks the characteristic of paid-up coverage after a certain duration.

In summary, “Life Paid-Up at Age 70” is considered a Limited-Pay Life policy because it involves a limited premium payment period, with premium payments ceasing at age 70, while the coverage remains in force for the insured individual’s entire lifetime. This aligns with the definition of Limited-Pay Life insurance.

The other options do not qualify as Limited-Pay Life policies because they do not have a specified, limited premium payment period, and they require ongoing premium payments to maintain coverage.