Question

What kind of policy provides the option for the policyowner to pay for the entire policy over a specific and usually shorter period of time and grows cash value faster than ordinary life and matures when the insured reaches age 100 or dies?

Answer 1

A limited pay whole life insurance policy allows policyowners to pay off their policy in a shorter period and the cash value grows faster than ordinary life insurance. It matures at age 100 or upon the death of the insured and can be used as personal financial account.

Step-by-step explanation:

The kind of policy that provides the option for the policyowner to pay for the entire policy over a specific and usually shorter period of time, and which grows cash value faster than ordinary life, and matures when the insured reaches age 100 or dies, is known as a limited pay whole life insurance policy. This type of policy is designed to build up cash value more quickly because the premiums are paid over a shorter period, while the policy remains in effect for the insured's entire lifetime. The cash value accumulated can be used as an account for the policyholder's personal use. Limited pay policies are often more expensive in the short term due to the accelerated payment schedule but can be financially beneficial in the long term.