What does term insurance provide?

Term insurance is designed to offer a straightforward form of life insurance that provides coverage for a specified period. During this term, if the insured individual passes away, the policy pays out the death benefit to the beneficiaries. Importantly, term insurance does not accumulate cash value, which means it strictly serves as a protective measure without any savings component.

This characteristic makes term insurance different from permanent insurance types, which often include a savings or investment element alongside the death benefit. The simplicity and focus on providing financial protection only for the duration of the policy make term insurance an appealing and cost-effective option for many individuals seeking life coverage without the complexities associated with other types of insurance.