What distinguishes term life insurance from whole life insurance?

Term life insurance is characterized by its coverage for a specific period, which may range from a few years to several decades. This type of policy is designed to provide financial protection to beneficiaries only if the insured passes away during the defined term. If the term expires and the insured is still alive, the coverage ceases without any value unless renewed or converted to another policy.

On the other hand, whole life insurance provides coverage for the entire lifetime of the insured, as long as premiums are paid. The nature of whole life insurance also includes a savings component known as cash value, which accumulates over time and can be borrowed against or surrendered for cash.

The distinction in coverage duration is a fundamental aspect that sets term life apart from whole life insurance, making it an ideal option for individuals seeking affordable temporary coverage without the long-term commitment or investment features associated with whole life policies.