What does it mean for a policy to have no remaining value upon payout?

A policy having no remaining value upon payout refers specifically to the concept associated with term life insurance. Term life insurance is designed to provide coverage for a specified period, such as 10, 20, or 30 years. If the insured person passes away during that term, the policy pays out a death benefit to the beneficiaries. However, if the term expires and the insured is still alive, the policy does not accumulate any cash value, and there is no payout. Therefore, upon the conclusion of the term, the policy essentially has no remaining value.

This is distinct from whole life and universal life policies, which are types of permanent insurance that do build cash value over time. As such, if those policies lapse or are surrendered, they often have a cash value that the policyholder can access. Life only, while related to life insurance, does not specifically denote a policy type that has no remaining value, further underscoring why term life is the appropriate choice here.