<P> A blending of participating and term life insurance, wherein a part of the dividends is used to purchase additional term insurance . This can generally yield a higher death benefit, at a cost to long term cash value . In some policy years the dividends may be below projections, causing the death benefit in those years to decrease . </P> <P> Limited pay policies may be either participating or non-par, but instead of paying annual premiums for life, they are only due for a certain number of years, such as 20 . The policy may also be set up to be fully paid up at a certain age, such as 65 or 80 . The policy itself continues for the life of the insured . These policies would typically cost more up front, since the insurance company needs to build up sufficient cash value within the policy during the payment years to fund the policy for the remainder of the insured's life . With Participating policies, dividends may be applied to shorten the premium paying period . </P> <P> A form of limited pay, where the pay period is a single large payment up front . These policies typically have fees during early policy years should the policyholder cash it in . </P> <P> This type is fairly new, and is also known as either "excess interest" or "current assumption" whole life . The policies are a mixture of traditional whole life and universal life . Instead of using dividends to augment guaranteed cash value accumulation, the interest on the policy's cash value varies with current market conditions . Like whole life, death benefit remains constant for life . Like universal life, the premium payment might vary, but not above the maximum premium guaranteed within the policy . </P>

Which statement about whole life policy is correct