What is Term Life Insurance?
Insurance glossary entry on BeCovered.ai for the term "Term Life Insurance": Life coverage for a set number of years with no built-up cash value. Scope: plain-language meaning for coverage discussions; confirm definitions on your policy forms.
Life coverage for a set number of years with no built-up cash value.
Understanding Term Life Insurance
Term life offers pure protection at the lowest initial premium per dollar of death benefit. At renewal, premiums jump with age unless you reapply or convert to permanent coverage per contract terms.
Examples
- Level term 20 to cover a mortgage until children finish college.
- Annual renewable term used for short-duration key person coverage.
- Decreasing term historically tied to loan amortization schedules.
Common Questions About Term Life Insurance
What happens when term ends?
Coverage ends unless you renew, convert (if available), or replace with a new policy. Replacement triggers new underwriting and pricing.
Is a medical exam always required?
Not always—accelerated underwriting and simplified issue exist—but limits are lower and pricing may be higher than fully underwritten term.
Related Insurance Types
Related Terms
Rider
An add-on provision to an insurance policy that changes or extends coverage.
Premium
The amount you pay to your insurance company for your coverage, typically monthly or annually.
Coverage Limit
The maximum amount your insurance company will pay for a covered claim.
Exclusion
Specific situations, conditions, or types of damage that your insurance policy does not cover.