Why is term insurance often selected by policyholders?

Term insurance is often selected by policyholders primarily because it provides substantial coverage for a minimal cost. This type of insurance is designed to provide a death benefit to beneficiaries if the insured passes away during the policy term, which is typically set for a certain number of years (e.g., 10, 20, or 30 years).

The affordability of term insurance makes it an attractive option for individuals seeking coverage during specific financial responsibilities, such as raising children, paying off a mortgage, or ensuring that debts are covered. Since term insurance does not accumulate cash value, the premiums are significantly lower compared to whole life or universal life policies that include an investment component.

Due to its cost-effectiveness and straightforward nature, policyholders can secure high levels of coverage without a substantial financial burden, making it a popular choice for many seeking life insurance protections.