What is a key feature of term life insurance?

A key feature of term life insurance is that it pays a benefit only if the insured dies during a specific term. This type of insurance is designed to provide coverage for a predetermined period, such as 10, 20, or 30 years. If the insured passes away during that term, the beneficiaries receive the death benefit. However, if the insured survives beyond the term of the policy, no benefit is paid out, and the coverage expires unless it is renewed, converted to a different type of policy, or extended under specific terms.

The nature of term insurance makes it an affordable option for those seeking substantial coverage without the additional costs associated with permanent life insurance. Permanent life insurance policies, in contrast, provide lifelong coverage and usually build cash value over time, which is not a feature of term life insurance.