What is term life insurance?

Term life insurance is good for a certain period of time. This can be anywhere from one year to 30 years. If the policyholder dies during the term, the beneficiaries of the term life insurance policy receive a payout known as a death benefit.

If the policyholder dies after the term has already expired, no benefit is paid out. Typically, these policies have maximum issue ages. There are two kinds of term life insurance: annual renewable term and level premium term. The annual renewable term policy gives a year of coverage renewed annually, and the level premium term is purchased for a multi-year period. The cost of term life insurance is dependent on health, age and the amount of death benefit desired.