Function

• The function of term life insurance is to provide your family with a death benefit for a specified period of time at an affordable price. This protects your family's ability to maintain its current lifestyle in the event that you die suddenly.
  
  

Types

• The most common type is a guaranteed fixed-premium policy, in which the monthly cost remains the same for the duration of the policy. Another type is called annually renewable term, wherein the premium increases every year. The most common duration is 20 years, but most companies offer policies that range from a single-year term to 30 years.
  
  

Features

• Your beneficiaries will receive a lump sum if you die while the policy is still active. In most cases, if you live beyond the term, there is no more coverage and you typically receive no refund of premiums paid.
  
  

Size

• Term insurance policies can range from $10,000 up to several million dollars. The amount of your death benefit will vary depending on your individual situation, financial resources, and family needs.
  
  

Premium Versus Risk

• Your premium will depend on the insurance company's analysis of your risk, which includes an examination of your occupation, driving record, and health history. If you are considered to be a higher risk, your premium will be increased accordingly.