What is typically true about term life insurance?

Term life insurance provides coverage for a specific time period, which is a fundamental characteristic of this type of policy. It is designed to offer a death benefit for a predetermined term, such as 10, 20, or 30 years. If the policyholder passes away during this period, the beneficiaries receive the death benefit. However, if the policyholder outlives the term, the coverage expires, and there is typically no payout, which differentiates it from permanent life insurance options that build cash value and provide lifetime coverage.

This characteristic is crucial for those seeking affordable life insurance for a certain period, such as while raising children or paying off a mortgage. Understanding this aspect helps individuals evaluate their insurance needs based on their financial responsibilities and goals during a defined life stage.