Term Life Insurance
Unlike Whole, Universal and Variable Life policies, a Term Life Insurance policy does not build up any cash value over time. Similar to auto or homeowners insurance, a Term policy buys protection one year at a time. A death benefit is paid only if you die within a period of time covered by the policy—not throughout your whole life. Typically, Term Life policies are sold with level premium periods ranging from 10 to 30 years. Because no cash value accrues—and you are paying solely for insurance—the cost of a Term policy is considerably less. People interested in buying the greatest amount of protection for the lowest price, for a limited period of time, often find Term Insurance to be a good choice. Note: Most term plans can be converted to a Whole or other permanent life insurance plan without the policyholder undergoing medical examinations or having to prove insurability.