What is a potential disadvantage of term life insurance compared to permanent life insurance?

Term life insurance indeed has the characteristic of not accumulating cash value, which is a fundamental trait that distinguishes it from permanent life insurance. Therefore, with term life insurance, policyholders pay premiums for a specific period, and if they pass away during that time, their beneficiaries receive the death benefit. However, if they outlive the term of the policy, they do not receive any cash value or return on their investment; they simply have the coverage during that period.

In contrast, permanent life insurance is designed to provide coverage for the entirety of a policyholder's life, as long as premiums are paid. Additionally, permanent life insurance accumulates a cash value over time that policyholders can borrow against or withdraw, serving as a savings or investment component. The absence of this cash value in term life insurance is a significant disadvantage for individuals seeking both insurance protection and a financial asset that grows over time. This is why the lack of accumulated cash value is a notable drawback when comparing term life insurance to permanent options.