What characteristic makes term insurance typically more affordable than permanent insurance?

Term insurance is typically more affordable than permanent insurance primarily because it has a shorter coverage period. Term insurance provides coverage for a specific number of years, and premiums are generally lower during that time as the insurer only has to pay out if the insured person passes away during the term. If the insured survives the term, the insurance coverage ends, and there’s no payout.

In contrast, permanent insurance is designed to provide lifelong coverage, which often includes a cash value component that accumulates over time. This additional benefit and the longer duration of the coverage contribute to higher premiums. Term insurance benefits from this model by offering a simpler, more straightforward product with lower costs for the policyholder, making it a more budget-friendly option for those seeking temporary protection.

The other options discuss aspects like cash value, complexity, and higher death benefits, but these features generally apply more to permanent insurance rather than term insurance, hence their relation to affordability is minimal compared to the shorter coverage period aspect.