Term Insurance characteristics include?

Term Insurance characteristics include?

• A. Offers permanent coverage with cash value.
• B. PAYS dividends to policyholder.
• C. Provides temporary life protection for a specified period with no cash value or living benefits.
• D. Has adjustable death benefit based on market performance.

Answer: (C)

Term insurance is pure temporary life protection. It provides a death benefit if the insured dies during a defined period, but it does not build cash value and offers no living benefits. Because there’s no cash value, you can’t borrow against it or use it for cash surrender value, and if you outlive the term, the coverage ends (though some term policies offer conversion or renewal options). This contrasts with permanent life policies, which combine lifelong protection with a cash value component, potential dividends, or living benefits, and with investment-linked policies that can vary with market performance.

Term insurance is pure temporary life protection. It provides a death benefit if the insured dies during a defined period, but it does not build cash value and offers no living benefits. Because there’s no cash value, you can’t borrow against it or use it for cash surrender value, and if you outlive the term, the coverage ends (though some term policies offer conversion or renewal options). This contrasts with permanent life policies, which combine lifelong protection with a cash value component, potential dividends, or living benefits, and with investment-linked policies that can vary with market performance.