You’re probably asking, what is term life insurance? Well it is “pure” insurance. It offers protection only for a specific period of time. If you die within the time period defined in the policy, the company will pay your beneficiaries the face value of your policy.

Term insurance is different from other forms of life coverage, which generally offer lifetime protection as long as premiums are paid regularly. All the premiums paid are used to cover the cost of coverage protection, and as such, you do not receive a refund at the end of the policy period. The policy just terminates.

What is term life insurance? This is said to be protection for a limited period which does not have a maturity value if the insured survives the period specified in the policy. It is a coverage that provides protection only for a specified period of time. Unlike other insurance, a term life insurance policy does not build up additional values which the insured can withdraw. If the person dies during this term, the beneficiary receives the face amount of the policy. The policy automatically expires at the end of the period.

It is generally the cheapest form of cover. What is term life insurance? It provides coverage to an individual for a pre-determined period of time which is also called a term. If the person insured dies while covered, the named beneficiaries will get a death benefit. Apart from this there are no other benefits.

Increase in premiums on every renewal is the main shortcoming associated with all types of term coverage. The reason for this is that as you grow older, your mortality rate increases, and the likelihood of your death increases. The insurer feels that as he will have to pay a death benefit he has an enhanced risk. This is often called as pure form of insurance because it involves payment of a premium in exchange for a commitment to pay a death benefit in case you die while the contract is still alive. It does not build up any cash value. Its primary purpose is to provide for the financial responsibilities of the insured.