What is a key difference between ordinary whole life and limited payment whole life?

The key difference between ordinary whole life and limited payment whole life lies in the period over which premiums are paid. In an ordinary whole life policy, premiums are typically paid for the entire lifetime of the insured, which means that payments continue until the death of the policyholder or until they reach a certain age, often 100 or 121 years.

In contrast, a limited payment whole life policy is designed so that premiums are paid for a specified number of years, after which the policy is considered paid up, and no further premiums are required. This structure allows policyholders to accumulate cash value while still limiting the time they are obligated to pay premiums, often offering a lapse-free insurance coverage during their lifetime.

Understanding this difference is crucial when determining the right type of whole life insurance policy based on an individual's financial goals and preferences regarding premium payment schedules.