Life Insurance FundamentalsQuestion 122 of 716
Which characteristic best distinguishes term life insurance from whole life insurance?
a.Term insurance guarantees continuing coverage all the way to attained age 121
b.Term insurance provides coverage for a stated period with no cash value
c.Term insurance allows the policyowner to borrow against the policy through policy loans
d.Term insurance builds tax-deferred cash value that the owner can draw on in retirement
Explanation
Term insurance is pure protection: it pays a death benefit only if the insured dies during the term and accumulates no cash value. Cash value, lifetime coverage, and policy loans are features of permanent products such as whole life.
Law Reference: Cal. Ins. Code §10113; standard insurance principlesThis topic, taught in full in the California Life & Health Insurance Producer Exam guide. California Life & Health Insurance Producer Exam — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)