What is term life insurance?
Simply speaking, term life insurance is a temporary life insurance policy that lasts for a predetermined amount of time. Some common term length options include 10, 15, 20, 25, and 30 years. Exact term options can vary from one insurance carrier to the next. The policy pays out death benefits if the insured dies during the coverage term. Otherwise, the coverage expires at the end of the term with no money returned to the policyholder.
Term life insurance tends to offer the lowest initial cost to protect your family and loved ones, offering affordable coverage. However, these policies generally do not carry any cash value, so they don't accumulate savings over time.
Generally, term life insurance is best for younger people who have significant but temporary financial expenses that would need to be covered if the policyholder were to pass away. This may include younger newlywed couples, adults with young children and mortgages, and individuals with large amounts of debt.