The correct answer is: A. In a limited payment policy, there is a maximum limit to the SA.
A limited payment policy is a type of whole life insurance policy that allows you to make a set number of payments over a specified period of time, after which the policy will continue in force without further payments. The maximum limit on the SA in a limited payment policy is the amount of the policy’s death benefit.
A limited payment policy can be a good option for people who want to have the peace of mind of knowing that their loved ones will be taken care of financially in the event of their death, but who also want to limit their long-term financial obligations.
Here is a brief explanation of each option:
- A. In a limited payment policy, there is a maximum limit to the SA. This is correct, as explained above.
- B. In a limited payment policy, there is a maximum limit to the term. This is incorrect, as there is no maximum limit to the term of a limited payment policy. The term of a limited payment policy is the length of time that you will make payments on the policy. After the term ends, the policy will continue in force without further payments.
- C. Both the statements above are wrong. This is incorrect, as only statement A is correct.
- D. Both the statements above are correct. This is incorrect, as only statement A is correct.