Term life insurance is designed to provide temporary protection for a specific period of time, with no accumulation of cash value.

• A. True; it provides temporary protection with no cash value
• B. True; it provides temporary protection and builds cash value
• C. False; it provides permanent protection with cash value
• D. False; it provides only accidental death coverage

Answer: (A)

Term life is built to provide coverage for a specific period, like 10, 20, or 30 years, to protect your beneficiaries if the insured dies during that time. It does not create any cash value or savings component—the policy is purely a death benefit for that term. If the term ends, the coverage ends unless you renew or convert to a permanent policy. That contrasts with permanent life insurance, which accumulates cash value over time and can be borrowed against. Some term policies may offer a return-of-premium feature, which refunds premiums if you outlive the term, but this still doesn’t establish a cash-value account you can access like in permanent policies.

An option stating it provides permanent protection with cash value is incorrect, since term policies are temporary and lack cash value. Another option suggesting coverage is only for accidental death is also not accurate, because term life covers death from any cause.