What is Term Insurance and How Does It Work?

Term insurance is temporary life insurance that provides protection for a specific number of years.

With term insurance you select the "term" (duration) of your policy and you pay a premium each year for the amount of life insurance coverage you purchase.

If the insured person dies during the policy term, the death benefit is paid out to the beneficiary from the insurance company.

If the insured person is still alive when the policy term expires, there is no payout and the insurance company keeps the premiums paid.

Term insurance is the lowest priced type of life insurance because it is temporary and does not build any cash value inside the policy.

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