Which of the following is a feature of term insurance?

Term insurance is characterized by providing coverage for a specific period, which is why the correct answer highlights this feature. Unlike permanent insurance policies, which offer lifelong coverage and may include an investment component, term insurance is designed to protect the insured for a set duration—often ranging from one year to several decades. If the insured passes away during this specified term, the beneficiaries receive the death benefit. However, if the term expires and the insured is still alive, the coverage ends unless it is renewed or converted to a different type of policy.

This distinction is important for individuals seeking insurance primarily for temporary needs, such as raising children or covering a mortgage, as term insurance is typically more affordable than whole life or universal life insurance. The focus on coverage for a specific period aligns with the needs of those looking for short-term financial security without the complexities and costs that come with permanent insurance.