Term life insurance is a type of life insurance policy that provides coverage for a certain period of time, or a specified "term" of years. If the insured dies during the time period specified and the policy is active, or "in force," a death benefit will be paid.

Term insurance is initially much less expensive when compared to permanent life insurance, such as whole life and universal life. This because it's not designed to last through old age, which is when life insurance premiums are the most expensive. And unlike most types of permanent insurance, term insurance has no cash value.

KEY TAKEAWAYS

• Term insurance is a type of life insurance policy that provides coverage for a certain period of time, such as 30 years.
• If the insured dies during the time period specified in a term policy and the policy is active, a death benefit will be paid.
• Most term policies offer level premiums for the duration of the policy.
• Many term policies offer the option to convert from term to permanent insurance.