What is term life insurance?

Term life insurance is a type of life insurance that provides coverage for a specified period of time, often ranging from one to thirty years. The policyholder pays premiums during this timeframe, and if the insured person passes away while the policy is active, a death benefit is paid out to the beneficiaries. This type of insurance is often chosen for its affordability compared to permanent life insurance, as it does not accumulate cash value and is intended solely for providing financial protection during the designated term.

In contrast, other insurance types offer different features. Lifelong coverage, for example, pertains to whole life or universal life insurance policies, which remain active as long as premiums are paid. Critical illness insurance specifically focuses on providing benefits upon diagnosis of certain serious health conditions, rather than offering death benefits. Additionally, the option related to individuals over 65 refers to life insurance designed for seniors, but this is not unique to term life insurance as it can also apply to permanent policies. Therefore, the defining characteristic of term life insurance is its fixed duration of coverage, making the answer that describes it accurately particularly applicable.