Which statement about term life insurance is correct?

Term life insurance is characterized by its provision of coverage for a specified period, often referred to as the term. This term can range from one year to several decades, after which the policy typically expires if the insured does not pass away during that time. Once the term ends, there is no payout, and the policyholder cannot obtain benefits unless they renew or convert the policy, depending on the terms set by the insurer.

The other statements do not accurately reflect the nature of term life insurance. It is generally less expensive than permanent policies because it does not include a cash value component or the lifelong coverage that permanent policies offer. Term life does not accumulate cash value over time, as this feature is exclusive to permanent life insurance policies. Additionally, term life insurance does not provide lifelong coverage; it only covers individuals for the specific duration agreed upon at the outset of the policy.