Do term policies build cash value?

Term life insurance policies are designed primarily to provide pure life insurance coverage for a specified period of time, known as the term. One of the key characteristics of term life insurance is that it does not accumulate cash value. Cash value is a feature typically associated with permanent life insurance policies, such as whole life or universal life, where a portion of the premiums pays for the death benefit, and another portion accumulates as savings that can be accessed while the policyholder is alive.

Since term policies do not have a savings component, they cannot build cash value over time. This design allows term policies to offer lower premiums compared to permanent policies, making them an attractive option for individuals who need coverage without the intent of accumulating cash value. Therefore, the statement that term policies do not build cash value is accurate, which validates the choice selected.