Which of the following is a characteristic of term life insurance?

Term life insurance is characterized by its temporary nature, meaning it provides coverage for a specified term, such as 10, 20, or 30 years. One of the key features of many term life insurance policies is the option to renew the policy at the end of the term. This renewal, while convenient, generally comes at a higher premium rate. As the insured ages, the risk of mortality increases, leading to higher premiums upon renewal.

This feature is beneficial for policyholders who may want to continue coverage without undergoing further medical underwriting, though it also reflects the fact that the costs will increase as one gets older. Understanding this characteristic helps clarify how term life insurance differs from other types, such as whole life insurance, which builds cash value and lasts for the lifetime of the insured, but does not typically offer a renewal option.