What is a key characteristic of term life insurance?

Term life insurance is designed to provide coverage for a specific period, such as 10, 20, or 30 years. A key characteristic of this type of insurance is that it has no cash value. Unlike whole life or universal life insurance policies, which build cash value over time and can be borrowed against or cashed in, term life insurance solely provides a death benefit if the insured passes away during the term. If the term expires and the individual outlives the policy, there is no payout and no accumulated value, making the absence of cash value a distinct feature of term life insurance.

Other aspects of the insurance options mentioned do not apply to term life. For instance, term life does not provide lifelong coverage; it is limited to the predetermined duration. While some term policies may have specific riders, such as a waiver of premium provision or conversion options, these are not inherent to all term life policies. Additionally, premium flexibility is more characteristic of permanent life insurance policies, where policyholders can adjust their payments according to specific arrangements. Therefore, the correct answer emphasizes that term life insurance is unique in that it does not accumulate any cash value over time.