Life insurance that provides coverage for a specific period, typically 10, 20, or 30 years. If the insured dies during the term, the beneficiary receives the death benefit. If the term expires, coverage ends with no payout. Term life is the most affordable type of life insurance.
Related Terms
Death Benefit
The amount of money paid to the beneficiary when the insured person dies. The death benefit is generally income-tax-free for the recipient. It can be paid as a lump sum, installments, or an annuity depending on the policy and beneficiary preferences.
Permanent Life Insurance
Life insurance that provides coverage for your entire lifetime as long as premiums are paid, unlike term life which expires after a set period. Permanent policies include a cash value component and come in several forms: whole life, universal life, and variable life.
Convertible Term Policy
A term life insurance policy that includes the option to convert to a permanent life insurance policy without a new medical exam or proof of insurability. This feature is valuable if your health declines during the term, as you can lock in permanent coverage based on your original health rating.