Which of the following statements is true about term insurance?

Term insurance is designed to provide coverage for a specific period, or "term," and does not accumulate any cash value over time. This means that in exchange for premium payments, policyholders receive a death benefit only if they pass away within the term duration. If the term ends and the insured individual is still alive, there is no payout made, and the policy typically expires without value. This straightforward nature of term insurance makes it an appealing option for those looking for affordable life insurance protection without the investment component associated with permanent life insurance policies.

The other options present incorrect interpretations of term insurance: it does not guarantee a payout after the term ends, nor does it accumulate cash value. Additionally, term insurance is generally simpler and easier to understand compared to more complex forms of life insurance, such as whole or universal life policies, which have investment features and various options.