Life & Health Insurance Practice Exam 2026 – Your All-in-One Guide to Exam Success!

The type of life insurance characterized by a limited payment structure is typically an endowment policy, such as the one that matures at a specific age, like age 70. In an endowment policy, the policyholder pays premiums for a set period or until they reach a certain age, at which point the policy pays out either to the insured if they are alive or to the beneficiaries if the insured has passed away. This limited payment structure is designed to ensure that the cash value accumulates over time and is paid out in a lump sum at maturity, providing an efficient savings mechanism along with a death benefit.

Comparatively, term life insurance does not accumulate cash value and is designed only to provide a death benefit for a specified term, with premiums payable during that period. Whole life insurance involves lifetime coverage with level premiums payable throughout the insured's life, which generally does not reflect a limited payment structure. Universal life insurance is flexible in both premiums and coverage, allowing for variable premiums, which further differentiates it from a limited payment structure. Endowment policies, therefore, specifically fit the criterion of limited payments while providing a definitive payout at maturity, making them distinctive in this aspect.