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what is term life insurance

Term life insurance is a type of life insurance policy that provides coverage for a specified period of time, or “term.” If the policyholder dies during the term, the death benefit is paid to the beneficiary. If the policyholder does not die during the term, the policy simply expires and there is no payout.

Term life insurance is typically less expensive than permanent life insurance, which provides coverage for the entire lifetime of the policyholder. However, it does not build cash value and does not offer the same level of financial protection as permanent life insurance.

Term life insurance is often used to protect against the financial impact of the unexpected death of a breadwinner, to cover the balance of a mortgage, or to provide financial support for dependents. It is important to carefully consider the length of the term and the amount of coverage needed when purchasing a term life insurance policy.