Final answer:
Mortgage redemption life insurance is not a type of traditional whole life insurance; it is designed to pay off a mortgage upon the insured's death, and does not provide lifelong coverage with a cash value component like traditional whole life policies do.
Step-by-step explanation:
The student asks about types of traditional whole life insurance and needs to identify the option that does not belong in that category. Traditional whole life insurance provides permanent insurance protection and includes a death benefit and cash value component, which grows over time and can be borrowed against. The options listed are: Ten-pay life insurance. Graded premium life insurance. Single premium life insurance. Mortgage redemption life insurance
Upon reviewing the options, it becomes clear that the first three are types of whole life insurance: Ten-pay life insurance: Premiums are paid for ten years to keep the policy in force for a lifetime. Graded premium life insurance: Premiums start lower and gradually increase over time. Single premium life insurance: A lump sum is paid upfront to cover the entire cost of the policy for life. However, Mortgage redemption life insurance is not typically categorized as traditional whole life insurance; it is designed specifically to pay off a mortgage upon the insured's death, thus its main purpose is to act as a decreasing term insurance which correlates to the declining balance of a mortgage rather than providing lifelong coverage with a cash value component.