Which policy is designed to provide the policyowner with the best of both worlds—term and permanent coverage?

Which policy is designed to provide the policyowner with the best of both worlds—term and permanent coverage?

• A. Whole life
• B. Adjustable life
• C. Universal life
• D. Limited payment

Answer: (D)

Flexible blending of term and permanent coverage is achieved with adjustable life insurance. This type lets you change the death benefit and the premium, so you can use term-like protection during part of the policy while still building cash value for permanent coverage over time. In practice, you’re tailoring the mix to fit changing needs and budgets within a single policy, rather than sticking to a fixed permanent or fixed term structure. Whole life, by contrast, provides permanent coverage with fixed premiums and no built-in term period. Universal life offers flexible premiums and a cash value linked to credited interest but isn’t primarily described as combining term and permanent within one policy. Limited payment involves paying premiums for a limited period while coverage continues for life, but it doesn’t inherently blend term and permanent features.

Flexible blending of term and permanent coverage is achieved with adjustable life insurance. This type lets you change the death benefit and the premium, so you can use term-like protection during part of the policy while still building cash value for permanent coverage over time. In practice, you’re tailoring the mix to fit changing needs and budgets within a single policy, rather than sticking to a fixed permanent or fixed term structure. Whole life, by contrast, provides permanent coverage with fixed premiums and no built-in term period. Universal life offers flexible premiums and a cash value linked to credited interest but isn’t primarily described as combining term and permanent within one policy. Limited payment involves paying premiums for a limited period while coverage continues for life, but it doesn’t inherently blend term and permanent features.