What distinguishes term life insurance from other types of life insurance?

• A. It has cash value that grows over time
• B. It provides coverage for a specific period
• C. It pays for burial expenses only
• D. It cannot be renewed

Answer: (B)

Term life insurance is characterized primarily by its coverage for a specified duration, typically ranging from one to thirty years. This type of insurance is designed to provide a death benefit to beneficiaries if the insured passes away during that predetermined term. Once the term expires, the coverage ceases unless renewed or converted into a different type of policy. This distinct feature of having a defined time period for coverage sets term life insurance apart from whole life or universal life policies, which accumulate cash value over time and generally provide lifelong coverage as long as premiums are paid.

Options that suggest cash value accumulation, limitations to burial expenses, or non-renewability do not accurately reflect the basic nature of term life insurance. This specificity in coverage duration is what makes term life particularly appealing for individuals seeking temporary protection or for those wanting to ensure financial support for dependents during key life stages, such as until children are grown or a mortgage is paid off.