Term Life Insurance Basics

Term life insurance is a type of life insurance that provides coverage for a specific period of time, typically 10, 20, or 30 years. The death benefit is paid to the beneficiaries if the policyholder dies during the term, and the policy expires without any value if the policyholder does not die during the term. Term life insurance is generally less expensive than permanent life insurance, does not build cash value, and is obtained through private insurance companies. Pros of term life insurance include affordability, flexibility, simplicity, lower premiums for young and healthy individuals, potential for conversion, and protection of loved ones. Cons include limited coverage, higher renewal rates, no cash value, not guaranteed, no payout if the policyholder outlives the policy, and not a long-term savings vehicle.