What typically characterizes a term life insurance policy?

A term life insurance policy is primarily characterized by its defined time duration of coverage. This means that the policy provides life insurance protection for a specific period, such as 10, 20, or 30 years. If the insured person passes away during that period, the beneficiaries receive a death benefit. However, if the insured survives beyond the policy term, the coverage expires without any payout or cash value accumulation.

This characteristic distinguishes term life insurance from other types of life insurance policies, such as whole life or universal life, which provide coverage for the entire lifetime of the insured and often include a savings or investment component. By focusing on a specific term, these policies typically offer lower premiums, making them an attractive option for those seeking temporary coverage for specific financial obligations, like a mortgage or college expenses for children. Hence, the answer accurately reflects a fundamental aspect of term life insurance.