What is term life insurance?

Term life insurance is a type of life insurance policy that provides coverage for a specified duration, or term, which can range from 1 year to 30 years or more. The key aspect of this insurance is that it pays a death benefit only if the insured passes away within that predetermined period. If the insured outlives the term, the policy typically expires without any payout, and there is usually no cash value accumulation like in other types of life insurance.

This structure makes term life insurance more affordable than whole life or universal life insurance, as it focuses purely on providing a death benefit for a specific timeframe without additional savings or investment elements. Individuals often choose term life insurance to secure financial protection for their dependents during critical periods, such as while raising children or paying off a mortgage.