Term Life Insurance

AAA

DEFINITION of 'Term Life Insurance'

A policy with a set duration limit on the coverage period. Once the policy is expired, it is up to the policy owner to decide whether to renew the term life insurance policy or to let the coverage end. This type of insurance policy contrasts with permanent life insurance, in which duration extends until the policy owner reaches 100 years of age (i.e. death).

INVESTOPEDIA EXPLAINS 'Term Life Insurance'

These types of policies provide a stated benefit upon the death of the policy owner, provided that the death occurs within a specific time period. However, the policy does not provide any returns beyond the stated benefit, unlike permanent life insurance policies, which have a savings component that can be used for wealth accumulation.

VIDEO

RELATED TERMS
  1. Free Look Period

    A period where a new insurance policy owner is able to terminate ...
  2. Universal Life Insurance

    A type of flexible permanent life insurance offering the low-cost ...
  3. Renewable Term

    A clause in a term insurance contract that allows the beneficiary ...
  4. Annual Renewable Term (ART) Insurance

    A form of term life insurance that offers a guarantee of future ...
  5. Decreasing Term Insurance

    A type of annual renewable term life insurance that provides ...
  6. Variable Life Insurance Policy

    A form of permanent life insurance, Variable life insurance provides ...
Related Articles
  1. How can I borrow money from my life ...
    Insurance

    How can I borrow money from my life ...

  2. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  3. Top 10 Life Insurance Myths
    Insurance

    Top 10 Life Insurance Myths

  4. Protect Your Kids And Pets With Custom ...
    Insurance

    Protect Your Kids And Pets With Custom ...

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center