What is term life insurance?

Term life insurance is defined as a policy that provides coverage at a fixed rate for a limited period of time. This means that the insured pays premiums for a specified term—often ranging from one to thirty years—and if the insured passes away during this term, the beneficiaries receive a death benefit. If the term expires and the insured is still alive, there is no payout; thus, the policy does not accumulate any cash value.

This type of insurance is generally more affordable than whole life policies, making it a popular choice for individuals seeking temporary coverage, such as during the years when financial obligations (like raising children or paying off a mortgage) are at their peak. Understanding the nature of term life insurance is crucial for clients evaluating their long-term financial planning needs and how insurance fits within that framework.