Term Insurance characteristics: Which statement is true?

• A. It accumulates cash value
• B. It provides lifetime coverage
• C. It pays benefits only if the insured dies during the term
• D. It is more expensive than whole life

Answer: (C)

Term life insurance provides temporary protection with a fixed death benefit and no cash value buildup. The payout occurs only if the insured dies during the term. If the term ends while the insured is alive, the policy expires and no benefit is paid. Some terms may be renewable or convertible, but the core feature remains: no cash value and coverage ends when the term ends. Because there’s no savings component, term is typically cheaper than whole life, which does build cash value and offers lifelong coverage.