Question

26 lee is a single dad who is 41 years old. he wishes to purchase a life insurance policy on his life, naming his son as the beneficiary. lee is primarily looking for a policy that offers coverage for life but would like the premium payments to stop after his retirement at 70. lee earns a good income and does not mind spending on extra premiums while employed. which of the following insurance policies meets lees objectives?
a. a ul policy with a level death benefit
b. a 30 - year term insurance policy
c. a limited payment whole life policy
d. a t - 100 policy with a gib rider

Explanation:

To solve this, we analyze each option:

• Option a: A UL (Universal Life) policy's premium and death benefit flexibility doesn't match the "premium stops at retirement" and "lifetime coverage" with limited payment focus.
• Option b: A 30 - year term policy only provides coverage for 30 years, not for life, so it's eliminated.
• Option c: A limited payment whole life policy provides lifetime coverage (as it's whole life) and allows premium payments to be completed within a limited period (Lee can pay while employed until retirement at 70, and then premiums stop). This matches his objectives.
• Option d: A T - 100 policy (Term to 100) with a GIB (Guaranteed Insurability Benefit) rider focuses on term coverage to age 100 and the rider for future insurability, not on limited premium payment for lifetime coverage.

Answer:

c. A limited payment whole life policy