What is a key characteristic of a perpetual mutual insurance policy?

A key characteristic of a perpetual mutual insurance policy is that it is funded by a single premium up front. This means that the policyholder pays a one-time premium that covers their insurance needs for the duration of the mutual insurance arrangement. Perpetual mutual policies are designed to provide ongoing coverage without the need for periodic premium payments, which makes them distinct from term insurance policies that require regular renewals or payments.

In this context, the other options do not accurately represent the nature of a perpetual mutual insurance policy. The first choice suggests that it requires ongoing monthly payments, which is not aligned with the concept of a single premium. Likewise, the third option indicates that there is a limited term of coverage, which contradicts the idea of "perpetual" coverage. The fourth option states that it can only be purchased through brokers; however, perpetual mutual insurance can be offered through various channels, including direct sales. Thus, the core characteristic of being funded by a single premium makes the chosen option the correct one.