Tennessee Life and Health Insurance Practice Exam 2025 - Free Life and Health Insurance Practice Questions and Study Guide

Term life insurance policies are primarily known for their low initial premiums, making them an affordable option for many individuals seeking life insurance. These policies provide coverage for a specified term, typically ranging from one to thirty years, during which the premiums are generally lower than those of permanent life insurance policies. This affordability is attractive to individuals who want to ensure financial protection for their beneficiaries without the higher costs associated with whole or universal life insurance.

In contrast, options like high cash value accumulation are more characteristic of permanent life insurance policies, which include a savings or investment component that builds cash value over time. Long-term coverage typically implies that the policy lasts for the insured's entire life, a feature associated with permanent life insurance rather than term policies, which expire at the end of the term without payout if the insured survives that period. Lastly, while term insurance does provide for a guaranteed payout if the insured passes away during the covered term, this characteristic does not distinguish term insurance compared to permanent options, as both can offer payout under specific circumstances. Thus, the correct answer highlights the significant financial advantage of term life insurance regarding its initial costs.