Texas Life Agent Practice Exam 2025 – Complete Prep Guide

A Limited-Pay Life policy is designed to provide coverage while limiting the premium payment period. It allows the policyholder to pay premiums for a specified period rather than throughout their lifetime.

The 20-Pay Life policy is a type of Limited-Pay Life insurance, where the insured pays premiums for 20 years and then is fully paid up for the rest of their life. This means that the coverage continues for the insured's lifetime without the need for further premium payments after the initial period.

The other types of policies mentioned in the question either do not fit the definition of Limited-Pay Life or have a different structure. Endowment Life typically involves policies that pay a lump sum either at the end of the term or at the death of the insured, but it does not fit the specific framework of limited payment. Whole Life policies are designed for lifetime premium payments, and Universal Life policies have flexible payment options without a specific limited payment period, focusing instead on a cash value component.

Therefore, a 20-Pay Life policy stands out as the clear example of a Limited-Pay Life policy due to its predefined premium payment schedule that lasts for a limited duration while ensuring lifelong coverage thereafter.