Tennessee Insurance Practice Exam

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Prepare for the Tennessee Insurance Exam with engaging flashcards and comprehensive multiple-choice questions. Understand hints and receive detailed explanations for each query. Ace your test with confidence!

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What is the main disadvantage of term life insurance as a product?

It accumulates significant cash value over time
It only provides temporary coverage
It is more expensive than whole life insurance
It has complex tax implications

The correct answer is: It only provides temporary coverage

Term life insurance primarily provides coverage for a specified period, such as 10, 20, or 30 years. Once the term expires, the policy does not continue, and the insured receives no payout unless they pass away during the coverage period. This limitation means that individuals who outlive their policy will need to either purchase a new term policy, which may come at a higher premium due to age or health changes, or find alternative insurance solutions. In contrast, whole life insurance offers lifetime coverage and typically builds cash value over time, which can be accessed by the policyholder. Therefore, the temporary nature of term life insurance is a significant disadvantage for those looking for long-term security, as there is a risk of being uninsured once the term ends.