Tennessee Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

Question: 1 / 400

What is a primary characteristic of term insurance?

Provides lifelong coverage

Has a cash value component

Expires at the end of the policy period

Term insurance is specifically designed to provide coverage for a specified period, meaning it will expire at the end of that policy term if the insured individual is still alive. This characteristic distinguishes it from permanent life insurance options, which provide lifetime coverage. Since term insurance does not accumulate cash value like whole life or universal life policies, the policyholder does not receive any payout if the policy expires without a claim.

The fixed nature of premiums is indeed a common feature in many term insurance policies, but the defining characteristic is the temporary nature of the coverage. Therefore, while fixed premiums are important, the essence of term insurance lies in its expiration at the end of the designated policy period. This makes it a suitable choice for individuals seeking protection for specific financial obligations or for a specific duration.

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Offers a fixed premium throughout the term

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