Which of the following best describes term life insurance?

Term life insurance is designed to provide coverage for a specific period, typically ranging from one year to several decades, depending on the policy terms. It offers a death benefit to the policyholder’s beneficiaries if the insured passes away during the term of the policy. This characteristic distinguishes term life insurance from other types, particularly those that build cash value or offer lifetime coverage.

In contrast to options that describe permanent life insurance, which accumulates cash value and usually comes with higher premiums, term life insurance focuses solely on providing a death benefit without any savings or investment component.

The implication that term life insurance applies only to high-risk individuals is also incorrect, as it is widely accessible and can be utilized by individuals regardless of their health status, assuming they meet the underwriting criteria. This clarity about the focus of term life insurance being a fixed period of coverage makes it an appealing choice for many who need affordable protection without the complexities of cash value accumulation.