What premium structure is associated with Limited Payment T-100 Policies?

Limited Payment T-100 policies are designed to provide permanent life insurance coverage with premiums that are only paid for a specified number of years, rather than over the insured's lifetime. The correct answer highlights that these policies typically have higher premiums for shorter payment terms. This is because the insurer needs to collect enough premium in a shorter period to ensure the policy remains fully funded for the insured’s lifetime.

Shorter payment terms compress the accumulation of cash value and the cost of insurance into a limited time frame, necessitating higher annual premiums to cover the higher upfront risk and administrative costs. Conversely, longer payment terms often spread the costs over more years, resulting in lower annual premiums.

This concept aligns with how limited payment policies are structured; while clients benefit from being free from premium payments earlier in life, they do so at the cost of higher premiums during the payment period.