Types of whole life policies.
Both continuous premium and limited payment whole life policies provide lifetime coverage.
Key difference between the two.
Continuous premium whole life requires premiums to be paid for the insured’s entire life.
Limited payment whole life requires premiums for a shorter, defined period (e.g., 20-pay, paid-up at 65).
Evaluate each option.
A. Length of time premiums are paid
Correct. This is the distinguishing feature.
B. Settlement options
Generally the same for both.
C. Mortality table
The same actuarial principles apply.
D. Dividend form
Not a distinguishing feature.
Conclusion.
The primary difference is how long premiums are paid.
