What is the term for a life insurance policy that provides temporary coverage?

The term life insurance policy is specifically designed to provide coverage for a specified period, or term, and is intended to pay a death benefit to the beneficiaries if the insured passes away during that time. This type of policy is straightforward and typically more affordable than permanent life insurance options because it does not have a cash value component and is designed purely for protection.

The distinction lies in the temporary nature of the coverage, which is why this policy is often favored for those who need life insurance for a limited duration, such as to cover a mortgage or provide for dependents while they are growing up. In contrast, whole life, universal life, and variable life insurance policies are all types of permanent insurance, which remain in effect for the lifetime of the insured, as long as the premiums are paid. They also accumulate cash value over time, providing additional benefits that term life does not offer.