What Does Term Life Insurance Mean?
Term life insurance provides insurance coverage for a specified period. It contrasts with permanent life insurance, which offers coverage until the policyholder's death. Once the term expires, the policyholder has the option to renew the policy, though the payment and conditions may differ.
Insuranceopedia Explains Term Life Insurance
As term life insurance solely offers a death benefit over a certain term, it does not suit estate planning and often functions as a form of income replacement. Other permanent life insurance policies have a savings component that expands the range of benefits beyond that of term life policies. Nevertheless, a guaranteed convertible policy provides some flexibility as it allows the policyholder to convert their policy into a permanent one without needing to undergo any medical screenings. In this way, the policyholder benefits from a less expensive term policy that can become a permanent policy as their needs change.