Provides death benefit coverage for a specified period of time with a premium that is initially low relative to permanent insurance premiums.  Premiums are initially low because most contracts do not cover individuals through old age, when death is most likely to occur.  The premium is based on the type of term plan you elect, the amount of coverage, risk status (smokers and people in poor health or with dangerous lifestyles pay higher premiums), your current age and the age to which coverage is desired. Term insurance policies which provide a death benefit at older ages will have substantially higher premiums.  The death benefit can be level or decreasing.  Term insurance does not have cash value.  If you terminate a term life insurance policy, none of the money paid in premiums is recoverable, with few exceptions.

Term life insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. This is in contrast to permanent life insurance such as whole life, universal life, and variable universal life.

Term life insurance provides coverage for a limited period of time, the relevant term. After that period, you may drop the policy or pay annually increasing premiums to continue the coverage. If the insured dies during the term, the death benefit will be paid to the beneficiary. Term insurance is often the most inexpensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis.

Term insurance functions similarly to most other types of insurance in that it satisfies claims against what is insured if the premiums are current and the contract has not expired, and does not expect a return of premium dollars if no claims are filed. As an example, auto insurance satisfies claims against the insured in the event of an accident and a home owner policy satisfies claims against the home if destroyed or damaged by catastrophic events. This is purely risk protection since whether or not these events will occur is uncertain. If the policy holder discontinues coverage due to sale of the insured home or car the insurance company will not refund the premium.