Term life insurance is a straightforward, cost-effective way to ensure that your beneficiaries will receive a death benefit if you pass away during the policy’s term. Unlike permanent life insurance policies (such as whole life insurance), term life insurance does not provide any savings, investments, or cash value upon expiration. Instead, it functions as a “pure” death benefit, providing a predetermined sum to recipients upon the policyholder’s death.

Premiums for term life insurance are typically lower than the premiums associated with permanent life insurance policies since the insurance company knows that it will not have to pay out a death benefit after a certain number of years. The downside, however, is that the policyholder does not collect any sort of return-on-investment for their premium payments.

The term length of a term life insurance policy can vary from 10, 15, to 20 years, depending on the insurance company. Generally, if you are younger, you are more likely to have access to longer term lengths. Insurers may sell a single contract covering the death of both spouses, offering a discount over an individual policy for each.

Due to the straightforwardness of term life policies and the discounts offered for couples, premiums for term life insurance coverage is often extremely affordable. Furthermore, some insurance companies give policyholders the option to convert their term life policy into a whole life insurance policy after the term has expired, as a way to take advantage of long-term savings or a cash value. This offers policyholders the flexibility of switching to a permanent life insurance product while also allowing them to not need to go through a new medical exam.

In summary, term life insurance is an affordable way to ensure that your beneficiaries will receive a death benefit if you die during the policy’s duration. Premiums are based on the policyholder’s age, health, and life expectancy, and generally tend to decrease with longer term lengths. Furthermore, some insurance companies allow policyholders to convert their policy into a whole life insurance policy, during or after expiration, as a way to further their savings, investments, and cash value.