What is a major feature of term life insurance compared to whole life insurance?

What is a major feature of term life insurance compared to whole life insurance?

• A. It offers cash value accumulation
• B. It provides coverage for a specified period
• C. It requires a single premium payment
• D. It is available only for juveniles

Answer: (B)

Term life insurance is primarily characterized by providing coverage for a specified period, which is often referred to as a "term." This can range from a few years to several decades, depending on the policyholder's needs. When the term expires, the policy does not accumulate cash value, and if the insured does not pass away during that period, the coverage ends without any payment of benefits. In contrast, whole life insurance offers lifelong coverage and typically includes a cash value component that builds over time. This accumulation of cash value and the guaranteed lifelong protection differentiates whole life from term life insurance. The other choices do not align with the defining characteristics of term life insurance. For example, while whole life insurance involves cash value accumulation, term life does not. Additionally, term life insurance usually involves regular premium payments rather than a single premium, and it is not limited to juveniles; it is available to individuals of various ages based on their coverage needs.

Term life insurance is primarily characterized by providing coverage for a specified period, which is often referred to as a "term." This can range from a few years to several decades, depending on the policyholder's needs. When the term expires, the policy does not accumulate cash value, and if the insured does not pass away during that period, the coverage ends without any payment of benefits.

In contrast, whole life insurance offers lifelong coverage and typically includes a cash value component that builds over time. This accumulation of cash value and the guaranteed lifelong protection differentiates whole life from term life insurance.

The other choices do not align with the defining characteristics of term life insurance. For example, while whole life insurance involves cash value accumulation, term life does not. Additionally, term life insurance usually involves regular premium payments rather than a single premium, and it is not limited to juveniles; it is available to individuals of various ages based on their coverage needs.