What type of life insurance policy pays a death benefit only if the insured dies within a specific time period?

Term life insurance is specifically designed to provide coverage for a predetermined period, typically ranging from one to thirty years. If the insured passes away during this specified term, the policy pays out a death benefit to the beneficiaries. This structure is straightforward; if the term expires and the insured is still alive, the policy does not pay out any benefit, and there is no cash value accumulated.

In contrast, whole life insurance offers lifelong coverage, ensuring that a death benefit is paid regardless of when the insured passes away, as long as premiums are maintained. Universal life insurance also provides lifelong coverage, along with flexible premium and benefit options, while variable life insurance combines a death benefit with a cash value component that can vary based on investment performance. These options emphasize permanent protection and potential investment growth, unlike term life insurance, which focuses on providing a temporary safety net tailored to specific financial responsibilities, such as children’s education or mortgage payments. This unique feature of term life insurance makes it an essential choice for individuals looking for coverage for a set duration.