What does term insurance typically cover?

Term insurance is designed to provide coverage for a specific period, which aligns with the needs and goals of the policyholder during that time frame. It is often chosen to cover financial obligations that have a clear endpoint, such as raising children, paying off a mortgage, or ensuring income replacement during working years.

Unlike whole life insurance or permanent insurance, term insurance does not accumulate cash value; it pays out a death benefit only if the insured passes away during the term of the policy. This makes it a more cost-effective option for many individuals who prioritize obtaining coverage for a limited duration tailored to their temporary needs.

The other options highlight features associated with different types of insurance products. Lifelong coverage with cash value pertains to whole or universal life insurance. Investment growth and retirement savings are typically associated with permanent life insurance policies or specific investment accounts rather than term insurance.