What characterizes term life insurance?

Term life insurance is characterized by the provision that it pays out a death benefit only if the insured passes away within a specific time frame, or "term." This term can vary, typically lasting anywhere from one to thirty years. Unlike permanent life insurance, term life does not accumulate cash value, which means it exclusively serves as protection against death within the term period. If the insured survives beyond the term, the coverage simply ends without any payout.

The option that indicates coverage without any cash value that pays for funeral expenses only does not accurately reflect the broader purpose and functionality of term life insurance. Funeral expenses can be part of the overall benefits, but term life insurance primarily focuses on providing a lump-sum death benefit rather than being limited to specific expenses. Additionally, options that suggest lifetime coverage with cash value or those that involve conversions into an investment account are characteristics associated with permanent life insurance products rather than term life insurance.