Scenario 93: Which of the following is a key characteristic of term life insurance?

Question: Scenario 93: Which of the following is a key characteristic of term life insurance?

Answer options:

• It provides coverage for the insured's entire life.
• It builds cash value that can be borrowed against. ✅ It provides coverage for a specific period, typically with no cash value.
• Premiums typically decrease over time.

Correct answer: It provides coverage for a specific period, typically with no cash value.

Explanation: Term life insurance provides coverage for a defined period (e.g., 10, 20, or 30 years) and typically does not accumulate cash value. The correct answer is "It provides coverage for a specific period, typically with no cash value.". This capacity-fill scenario 93 reinforces the same competency for the cfp bank and follows the certified explanation standard.