Question

John owns a ten pay life plan. Premiums for this policy must be paid:

A. For ten years
B. Until John retires
C. For ten years or until death, whichever occurs first
D. Until the first spouse dies

Answer 1

John’s ten pay life insurance plan requires premiums to be paid for a duration of ten years, option A. This type of plan has a limited payment term and is not contingent on retirement, death, or marital status.

Step-by-step explanation:

The question regarding John’s ten pay life plan is related to understanding the terms of a life insurance policy. This query falls under the category of Business, particularly in financial planning or insurance studies, which is typically studied at the college level.

Here, “premiums for this policy must be paid” seeks clarification on the nature and duration of premium payments for the ten pay life insurance plan that John owns.To answer the question: John must pay premiums for his ten pay life insurance plan for ten years. This is indicated by the name of the plan itself, which implies that the payment structure is limited to a predefined term of ten years.

The correct option based on the information provided is A. After ten annual premiums are paid, no further payments are typically necessary, and the policy remains in effect until John passes away, providing a death benefit to his beneficiaries. Other options, such as paying until retirement, until death, or until the first spouse dies, are irrelevant in the context of a ten pay life plan.