What characterizes term life insurance?

Term life insurance is characterized by its provision of coverage for a specified period or term. This means that the policy remains in force for a predetermined duration, such as 10, 20, or 30 years. If the insured passes away during this term, the policy pays a death benefit to the beneficiaries. However, if the insured survives beyond the term, the coverage ends and no benefit is paid out.

This differentiates term life insurance from other types of life insurance, such as whole life or universal life insurance, which provide coverage for the insured's entire life and often include a cash value component. Additionally, term life insurance does not limit the payment of benefits to scenarios involving accidental death; it pays benefits for any cause of death occurring within the term period, provided that the premiums are paid and the policy is active.