Life Insurance FundamentalsQuestion 122 of 315
Which characteristic best distinguishes term life insurance from whole life insurance?
a.Term insurance guarantees coverage to age 121
b.Term insurance provides coverage for a stated period with no cash value
c.Term insurance allows the policyowner to take policy loans
d.Term insurance builds tax-deferred cash value
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 principlesPractice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · 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)