What type of life insurance protects the policyholder for a specific term and does not accumulate cash value?

Term life insurance is designed to provide coverage for a specific period, known as the term, which can range from one year to several decades. This type of insurance is primarily focused on death benefits and is less complex than other forms of life insurance. It does not build cash value, meaning that the premiums paid contribute solely to the death benefit and not to any investment or savings component.

Because term life insurance is more straightforward, it often comes with lower premiums compared to whole life or other permanent life policies. This makes it an ideal choice for individuals looking for affordable protection for their loved ones during specific periods of financial responsibility, such as while raising children or paying off a mortgage.

In contrast, whole life, universal life, and variable life insurances are all types of permanent insurance, which means they offer lifetime protection and accumulate cash value over time. This distinguishes term life insurance as a more temporary solution, emphasizing the protection aspect without the investment component.