Final answer:
Limited payment policies in insurance refer to the option for policyholders to fully pay their premiums over a shorter period, after which no more payments are needed while coverage continues.
Step-by-step explanation:
The term "limited payment policies" refers to insurance policies that allow policyholders to pay off the entire policy within a shorter period of time than the policy provides coverage. This option, which can be found in some life insurance policies, means that the policyholder can choose to pay higher premiums for a certain number of years to cover the cost of the policy early, after which no further premiums are required, while the coverage continues for the life of the policy.
It's important to distinguish this from policies with limited coverage or limited benefits, as limited payment policies generally offer the same level of coverage as other policies; they simply allow for a different payment structure. Similarly, these policies should not be confused with those that require minimal paperwork (option B) or those with limited benefits (option D).
To summarize and answer the student's question directly, the correct answer is C) Policies that allow the policyholder(s) to pay for the entire policy in a shorter period of time.