PSI Ohio Insurance Practice Exam 2025 – Complete Preparation Guide

Term life insurance is the type of life insurance that offers coverage for a specified period, known as the "term," which can range from a few years to several decades. This means that if the insured person passes away during the term, the policy pays out a death benefit to the beneficiaries. If the insured survives the entire term, the coverage expires without any payout, and no benefit is collected.

This structure differs from other types of life insurance. Whole life insurance typically provides coverage for the insured's entire lifetime, as long as premiums are paid, and also accumulates cash value over time. Universal life insurance offers flexible premium payments and death benefits, and it also has a cash value component. Variable life insurance combines a death benefit with investment options, allowing the policyholder to allocate cash value among various investment accounts, which can fluctuate in value.

In contrast, term life insurance is straightforward, offering a pure death benefit with no cash value accumulation, making it an economical choice for many individuals seeking temporary coverage.