What best describes term life insurance?

Term life insurance is characterized by providing coverage for a specific period, or term, which can range from several years to several decades. During this time, if the insured individual passes away, the policy pays out a death benefit to the beneficiaries. This structure is designed to provide financial protection to dependents or loved ones during critical life stages, such as when children are young or a mortgage is being paid off.

The limited duration of coverage differentiates term life insurance from other types, such as whole life insurance, which offers lifelong coverage alongside a cash value component. By focusing exclusively on death benefits without any investment or savings elements, term life insurance is typically more affordable, making it accessible for individuals seeking financial safety nets during certain phases of their lives.