Final answer:
A Limited-Pay Life policy has premium payments limited to a specified number of years and generally includes a cash value unlike term insurance. Whole life policies have death benefits and can accumulate cash value. Life tables are instrumental for insurers to calculate fair premiums based on mortality rates and life expectancies.
Step-by-step explanation:
A Limited-Pay Life policy has premium payments that are limited to a specified number of years. This type of life insurance policy is designed so that the premiums are paid over a shorter period than traditional whole life policies, after which no additional premiums are due. Unlike term life insurance, which typically does not have a cash value, whole life policies, including limited-pay ones, often do have a cash value component that can be borrowed against or may accumulate value over time.
Regarding the concept of life tables, which provide critical data in the insurance industry, a life table includes the probability of each age group dying before their next birthday and their life expectancy at each interval. This tool is essential for insurance companies when calculating premiums and understanding the life expectancy of different demographic groups, helping to determine actuarially fair premiums.