Term Life Insurance
Term life insurance is purchased for a specified term, such as 10, 20, or 30 years. If the insured person passes away during the policy term, a death benefit is paid to the beneficiaries. Term life insurance generally has lower premiums compared to whole life insurance. The premiums remain fixed throughout the policy term, but they can increase when renewing the policy at the end of the term.
Term life insurance pays a death benefit only if the insured person dies within the policy term. If the policyholder outlives the term, there is no payout or cash value. Term life insurance does not accumulate cash value over time. It is purely designed to provide a death benefit.