25. Life insurance written to cover a need for a specified period of time at the lowest premium is called:
Answer: C
Level Term insurance
Level Term insurance is designed to provide coverage for a specified period of time at the lowest premium rates available. This type of insurance is particularly appealing for individuals seeking affordable protection for a predetermined duration.
A) Endowment 65
Endowment 65 is a type of life insurance that combines both life coverage and savings elements, typically paying out a lump sum after a specified period or upon death. It does not serve the purpose of providing coverage at the lowest premium for a limited time, making it an incorrect choice.
B) 20-pay Life
20-pay Life is a form of whole life insurance that requires premiums to be paid for 20 years, after which the policy is considered paid-up and remains in force for the lifetime of the insured. This option does not offer temporary coverage at the lowest premium, which is essential to the question.
C) Level Term insurance
Level Term insurance is specifically structured to cover a defined term, such as 10, 20, or 30 years, with level premiums throughout that period. This aligns directly with the question's requirement for affordable temporary coverage.
D) Permanent Life insurance
Permanent Life insurance provides lifelong coverage and typically involves higher premiums due to its cash value component. It does not fit the criteria of being low-cost for a specified term, thus making it incorrect for this question.
Conclusion
Level Term insurance is the definitive correct answer as it meets the criteria of providing coverage for a specified duration at the lowest premium possible. In contrast, all other options fail to offer temporary coverage or are associated with higher costs and longer payment periods.