What is a limited payment life insurance policy designed to do?

A limited payment life insurance policy is designed to ensure that the premiums are paid up before age 100. This means that the policyholder pays premiums for a specified, shorter period, such as 10, 20, or 30 years, after which the policy will be fully paid up, and no further premium payments are required, even though the coverage remains in force. This feature provides a sense of financial relief to the policyholder, as they won't have to worry about making payments into their later years while still securing a death benefit for their beneficiaries.

The other options don't accurately describe the nature of limited payment life insurance. Ensuring coverage only until age 80 does not reflect the typical purpose of the policy, as it is designed to provide lifelong coverage once the premium period is complete. A death benefit that decreases over time is more aligned with term life insurance policies, not limited payment life insurance. Similarly, requiring premiums until the insured’s death contradicts the core principle of a limited payment policy, which is to limit the duration of premium payments.