What is the primary benefit of a term life insurance policy?

The primary benefit of a term life insurance policy is its lower initial premiums. Term life insurance is designed to provide a death benefit for a specified term, such as 10, 20, or 30 years, and does not include a cash value component as found in permanent life insurance policies. This absence of a cash value allows the insurer to offer lower premiums compared to whole life or universal life insurance, making term life coverage more affordable for many individuals.

As a result, this affordability allows policyholders to secure significant coverage amounts for their beneficiaries at a fraction of the cost of permanent options. Many people appreciate this feature when they need temporary coverage or want to ensure financial support for dependents during critical years, such as while raising children or paying off a mortgage.