What is a common misconception about term life insurance?

A common misconception about term life insurance is that it provides lifelong coverage. In reality, term life insurance is designed to cover a specific period, typically ranging from 10 to 30 years. Once the term expires, the coverage ceases, and the policyholder does not have any insurance protection unless they renew or convert the policy. This is in contrast to permanent life insurance policies, such as whole life or universal life, which are intended to provide lifetime coverage as long as premiums are paid.

Understanding the nature of term life insurance is crucial for consumers to make informed decisions. While some may believe that term life offers lifelong benefits, recognizing its time-limited scope clarifies the need for reviewing one’s long-term insurance needs and planning accordingly.