North Carolina Life Insurance Practice Exam

Term life insurance typically concludes when the specified term expires or when the insured passes away. This type of insurance is designed to provide coverage for a predetermined period—often ranging from one year to 30 years—during which the insured's beneficiaries will receive a death benefit if the insured dies. If the term ends and the insured is still living, the coverage ceases, and there is generally no payout or value of the policy unless it is converted to a permanent plan or renewed under different terms.

Unlike other forms of life insurance, such as whole life or universal life, term policies do not accumulate cash value and are strictly for providing coverage for a set period. This structure allows term life insurance to be more affordable, as the insurer only pays out if the insured dies within that initial term. Therefore, option B accurately reflects the fundamental nature of term life insurance, focusing on the two events that would conclude the policy: the end of the term or the death of the insured.