Which life insurance component is considered temporary coverage?

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Term life insurance is classified as temporary coverage because it provides protection for a specified period, typically ranging from one to thirty years, depending on the policy terms. If the insured individual passes away within this time frame, the beneficiaries receive the death benefit. However, if the insured survives beyond the term duration, the coverage ends, and no benefit is paid out.

This contrasts with whole life insurance and permanent life insurance, which are designed to provide lifelong coverage as long as premiums are paid. Universal life insurance is another form of permanent coverage, offering both a death benefit and a cash value component that grows over time. Because term life insurance does not build cash value and expires after the specified term, it is considered a temporary solution for individuals seeking to cover specific needs, such as income replacement during the working years or to cover debts.

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