Which of the following statements is true about term life insurance?

Term life insurance is characterized by providing coverage for a specific period, or "term," and it typically has a lower premium compared to whole life insurance. This is primarily because term policies do not build cash value over time and only pay out if the insured individual passes away during the term of coverage. The cost-effectiveness of term life makes it appealing for individuals who need coverage for a limited duration, such as while raising children or paying off a mortgage.

The other statements do not accurately represent the nature of term life insurance. For example, term life insurance does not guarantee a payout regardless of the timing of death, as benefits only apply if death occurs within the specified term. Additionally, term policies do not accumulate cash value; that feature is typically associated with permanent policies like whole life. Finally, term insurance does not provide a lifetime coverage guarantee, as coverage ends when the term expires unless renewed or converted to a different policy.