What distinguishes term life insurance from permanent life insurance?

Term life insurance is characterized by its lack of cash value accumulation and generally lower cost compared to permanent life insurance. This makes it an attractive option for individuals seeking affordable coverage for a specific period—for example, to cover financial obligations like a mortgage or children's education. Unlike permanent life insurance, which includes a component that allows the policy to build cash value over time, term life provides pure death benefit protection for the duration of the policy term.

The assertion that term life insurance has no cash value is crucial because it reinforces the fundamental difference from permanent policies that are designed to last for the insured's lifetime and develop a cash value component. This cash value can potentially be borrowed against or withdrawn in later years, making permanent insurance a more complex financial product.

In summary, the statement highlights the primary distinctions between the two types of life insurance, particularly the aspect of cash value and cost, aligning with the characteristics of term life insurance.