What is a key feature of term life insurance?

A key feature of term life insurance is that it provides coverage for a specified term. This means that policyholders purchase life insurance for a predetermined period, which typically ranges from one to 30 years. If the insured individual passes away during this term, the beneficiaries receive a death benefit. If the term ends and the insured is still alive, the coverage ceases, and there is no payout or cash value accrued.

This structure differentiates term life insurance from whole life or universal life insurance, which do accumulate cash value over time. While some term policies may offer a renewable feature or have initially low premiums, the primary characteristic defining term life insurance is the fixed duration of coverage. Understanding this helps consumers determine if term life insurance meets their specific needs for temporary financial protection.