How is term life insurance defined?

Term life insurance is defined as coverage for a specified period without any cash value. This means that the policy provides a death benefit to the beneficiaries only if the insured passes away within the predetermined term, which could range from a few years to several decades. If the insured survives beyond this term, the coverage ends and there is no payout, nor is there any accumulated cash value that can be accessed or leveraged.

Unlike permanent life insurance, which includes cash value accumulation and lasts for the insured's lifetime, term life insurance is straightforward and focuses solely on providing financial protection during the specific term. This makes it often more affordable while only providing benefits in the event of death within that term period.

In contrast, other options pertain to different aspects of insurance that do not accurately represent the nature of term life insurance. They refer to lifelong coverage, cash-surrender values, or business liability, which are features of different insurance types or concepts.