Final answer:
Term life insurance does not accumulate cash value, unlike whole life insurance. It offers a death benefit for a predetermined term without an investment component.
Step-by-step explanation:
The statement that a term life insurance policy's cash value builds during a specifically limited period of time is false. Unlike whole life insurance, which does feature both a death benefit and accumulates a cash value, term life insurance provides only a death benefit for a specified term and does not build any cash value. Individuals may opt for term life insurance as a means of financial protection for their beneficiaries within that term, but it does not serve as an account for personal use or as an investment.
Life insurance companies offer financial protection for the survivors of the insured by paying out death benefits. After policies have been paid out, these companies have significant capital, which can be loaned out to borrowers, including policyholders who have whole life or other types of cash-value policies. It's important to understand the specific features of your life insurance policy and the implications for your financial planning.