IIAP Ordinary Life Practice Exam 2025 – Complete Preparation Guide

A term policy primarily offers protection, which means that it provides a death benefit to the beneficiary if the policyholder passes away during the term of the policy. This type of insurance is often sought after for its affordability and straightforward nature, as it strictly focuses on providing coverage for a specific period of time—typically ranging from one to thirty years.

In contrast to other types of life insurance, such as whole or universal life, term policies do not accumulate cash value or offer savings components. Therefore, while cash values, savings, and dividends might be prominent features of other insurance products, they are not relevant to the core function of a term policy. The main purpose of term life insurance is to offer financial security and peace of mind by ensuring that dependents are protected against the loss of income or support in the event of the policyholder's death during the coverage period.