Chartered Life Underwriter Practice Exam 2025 - Free CLU Practice Questions and Study Guide

Term insurance primarily does not provide lifetime coverage. This type of insurance is designed to cover individuals for a specific period, or "term," which can range from a few years to several decades. Once this period expires, the coverage ends, and unless renewed or converted to a different type of policy, it does not provide any payout or benefits after that point.

In contrast, other options such as income replacement, mortgage coverage, and temporary financial security are indeed within the scope of what term insurance can offer during its active coverage period. For example, term insurance can serve as an effective means of income replacement for dependents if the insured person passes away while the policy is in force, ensuring that financial obligations are met. Similarly, it can be utilized to cover mortgage payments, providing peace of mind that debts will be addressed in the event of the insured's untimely death. Additionally, it provides temporary financial security, as it offers a safety net for a designated time frame, helping families maintain their financial stability during times of lost income.

Therefore, the distinguishing feature of term insurance is its finite coverage duration, making it unsuitable for those seeking lifelong protection.