Which of the following types of insurance is designed to provide life insurance protection only for a limited time?

Which of the following types of insurance is designed to provide life insurance protection only for a limited time?

• A. Whole life insurance
• B. Permanent life insurance
• C. Term life insurance
• D. Universal life insurance

Answer: (C)

Term life insurance is specifically structured to offer life insurance coverage for a predetermined, limited period. This type of insurance is commonly chosen for its affordability and straightforward nature. When a policyholder selects a term policy, they will specify a term length—such as 10, 20, or 30 years—during which the insurance coverage remains active. If the insured individual passes away within this term, the beneficiaries receive the policy's death benefit. However, if the term expires and the individual is still alive, the coverage ceases, and no benefit is paid. In contrast, whole life and universal life insurances are types of permanent life insurance, providing lifelong coverage as long as premiums are paid, with a cash value component that accumulates over time. Therefore, their focus is on offering coverage that does not have an expiration, making them inherently different from term life insurance.

Term life insurance is specifically structured to offer life insurance coverage for a predetermined, limited period. This type of insurance is commonly chosen for its affordability and straightforward nature. When a policyholder selects a term policy, they will specify a term length—such as 10, 20, or 30 years—during which the insurance coverage remains active. If the insured individual passes away within this term, the beneficiaries receive the policy's death benefit. However, if the term expires and the individual is still alive, the coverage ceases, and no benefit is paid.

In contrast, whole life and universal life insurances are types of permanent life insurance, providing lifelong coverage as long as premiums are paid, with a cash value component that accumulates over time. Therefore, their focus is on offering coverage that does not have an expiration, making them inherently different from term life insurance.