What is typically a characteristic of term life insurance?

Term life insurance is primarily designed to provide coverage for a specific period, or term, which is why it is known as "term" insurance. One of its main characteristics is that it generally offers lower initial premiums compared to whole life insurance. This lower cost is appealing for many policyholders, particularly those who may only need coverage for a certain timeframe, such as while raising children or paying off a mortgage.

Unlike whole life insurance, term policies do not accumulate cash value over time, which is a distinguishing feature of permanent life insurance. Another aspect of term life is that it does not provide permanent coverage; coverage ceases when the term ends unless the policy is renewed or converted to a permanent policy. Additionally, while some term policies offer guaranteed renewal options, this is not a universal characteristic and can depend on the specific terms of the policy.

Thus, the correct answer highlights the cost-effectiveness of term life insurance as a key feature that resonates with individuals seeking affordable life insurance solutions for a limited duration.