South Carolina Life Insurance Practice Exam

What type of life insurance policy is Life Paid-up at Age 65?

1. Term Life

2. Universal Life

3. Limited Payment Whole Life

4. Whole Life

The correct answer is: Limited Payment Whole Life

Life Paid-up at Age 65 is a specific type of limited payment whole life insurance policy. In this policy, the premium payments are required for a specific period, which generally extends only until the insured reaches the age of 65. After the premiums have been paid in full, the policy becomes "paid-up," meaning no further premiums are required, yet the insured retains full coverage for their lifetime. Limited payment whole life policies like this one provide a combination of lifelong protection and a scheduled premium payment period, making them appealing for individuals who want to ensure they are finished paying for their life insurance by a certain age. This design helps policyholders manage their finances effectively while still ensuring that their beneficiaries will receive a death benefit. The paid-up status at age 65 can also offer peace of mind, as the financial commitment ends at that age while preserving coverage for the rest of the insured's life.