What is a key feature of a term life insurance policy?

A key feature of a term life insurance policy is that it provides coverage for a specified period. This means that the policy is designed to offer death benefit protection only for a predetermined duration, such as 10, 20, or 30 years. If the insured individual passes away within that time frame, the beneficiaries receive the death benefit. However, if the term expires and the insured is still alive, the coverage ends unless the policy is renewed or converted to a permanent policy.

This characteristic is crucial for individuals seeking affordable life insurance options, as term policies are generally less expensive than whole or universal life insurance, which includes features such as cash value accumulation. Understanding this aspect allows individuals to make informed decisions based on their financial needs and life circumstances.