What distinguishes term life insurance from whole life insurance?

Term life insurance is characterized by its structure of providing coverage for a specific period, which can range from a few years to several decades. This means that policyholders have life insurance protection only for the duration of the term they select. If the insured individual passes away within that specified term, the beneficiaries receive the death benefit. However, if the term ends and the insured is still alive, the coverage expires without any payout or accumulated value.

This distinction is crucial because it sets term life apart from whole life insurance, which is designed to last for the insured's entire lifetime, as long as premiums are paid. Whole life policies also accumulate cash value over time, offering a savings component that term policies lack. Thus, the only benefit of term insurance is the pure death benefit without any cash value accumulation, making the specific period of coverage a defining characteristic.