An insured forgets to pay his insurance premium. instead of the policy lapsing, the premium is paid by the company. this would suggest that a policy was purchased.

This would suggest that a Whole life policy was purchased.
a whole life policy is a kind of insurance policy that will stay active for insured's entire lifetime. (as long as the premium keep being paid on time)
One example of this type of insurance is a life insurance (which will give a specific amount of money to your family if you passed away)

Answer incentive systemmarket, property rights,monetary exchange

The second choice is the correct answer!