Term life insurance is a type of life insurance policy that provides coverage for a specified period, typically between 10 and 30 years. Heres how it works:

• Coverage: If the policyholder passes away during the term of the policy, the beneficiaries receive a death benefit payout. If the policyholder outlives the term, the policy expires and there is no payout.

• Premiums: The policyholder pays a premium for the duration of the policy. The premium amount is based on factors such as the policyholders age, health, and the amount of coverage needed.

• Renewal: At the end of the term, the policyholder can choose to renew the policy for another term, typically at a higher premium rate due to the increased age of the policyholder.

• Types of term life insurance: There are two main types of term life insurance: level term and decreasing term. Level term policies provide a fixed death benefit throughout the term of the policy, while decreasing term policies have a death benefit that decreases over time.

Term life insurance is usually the least expensive type of life insurance because it provides coverage for a restricted time and doesn’t have a cash value component like permanent insurance. It is a good option for young people with children who need substantial coverage for a low cost, and for those who have a specific need for coverage for a limited period of time, such as paying off a mortgage or other debt.