Which type of life insurance provides coverage for a set period of time?

Term life insurance is designed specifically to provide coverage for a predetermined period, which can range from a few years to several decades. This type of insurance is a straightforward protection plan that pays a death benefit if the insured passes away during the term of the policy. Once the term concludes, the coverage ceases, and there is typically no payout unless the insured has passed during that timeframe.

This characteristic differentiates term life from other types of life insurance. Whole life insurance, for instance, offers coverage for the entire lifetime of the insured, as long as premiums are paid. Universal life insurance provides flexible premiums and death benefits and is also designed for lifetime coverage. Variable life insurance combines a death benefit with an investment component, allowing the policyholder to allocate a portion of the premium to various investment options, also lasting for the lifetime of the insured.

Thus, the essence of term life insurance is its focus on providing a defined period of coverage, making it an attractive choice for those seeking temporary financial protection, such as covering debts or providing for dependents during critical years.