Term insurance has no value as an investment and is the least expensive type of life insurance.
The statement is correct. Term insurance is a type of life insurance that provides coverage for a specified period, such as 10, 20, or 30 years. It offers a death benefit to the beneficiaries if the insured person passes away during the term of the policy.
Term insurance is considered to have no value as an investment because it does not accumulate cash value over time. This means that if the policyholder outlives the term of the policy, there is no payout or return on the premiums paid. The purpose of term insurance is solely to provide financial protection to the beneficiaries in the event of the insured's death.
In comparison to other types of life insurance, such as whole life or universal life insurance, term insurance is generally more affordable. This is because it is designed to provide coverage for a specific period without the additional investment or savings features that come with other types of policies.
To determine the least expensive type of life insurance, you can compare the premiums of different types of policies offered by different insurance companies. It is recommended to request quotes from multiple insurers and compare the coverage, terms, and premiums to find the most affordable option for your specific needs and circumstances.