What type of insurance is described as temporary and does not build cash value?

Term insurance is designed to provide coverage for a specific period or term, typically ranging from one year to several decades. It is a straightforward and affordable option that pays a death benefit to the beneficiaries if the insured individual passes away during the policy term.

The key feature of term insurance is that it does not accumulate cash value like whole life or universal life policies do. Instead, it offers pure protection, meaning that the premium payments go solely towards the cost of insurance coverage rather than building a savings or investment component. This characteristic makes term insurance particularly appealing for those who need temporary coverage to protect financial obligations, such as a mortgage or children’s education expenses, without the added cost of a cash-value component.

In contrast, whole life and universal life insurance provide lifelong coverage and include an investment component that builds cash value over time, while an endowment policy also has cash value and typically pays out either upon maturity (after a predetermined period) or upon the insured's death.