A term life insurance policy provides financial protection for your family if you die during a specific period of time. For example, if you choose a five-year term and die within those five years, your family receives the benefit money from the policy.

Different Term Lengths

According to State Farm, term life policies are available for terms of 5, 10, 20 and 30 years. During the term, the premiums do not change.

Renewability

When the term of the policy is up, you usually have the option of renewing your policy. However, the premiums are likely to be higher. You may also not be able to renew after reaching a certain age, such as age 80 in New York.

Convertibility

Some term life policies will let you convert them into whole life policies as long as you do so before the term expires. This option may be useful for individuals who become seriously ill and may no longer qualify for affordable life insurance.

Cost

Term life policies typically have lower premiums than whole life policies so they are more affordable. Because of the lower premiums, you can purchase a larger amount of coverage if you choose.

Cash Value

Unfortunately, term life policies never build up any cash value the way whole life policies do, so you cannot "cash in" your policy in the event of a financial hardship. If you do not die during the term and do not renew the policy, all of the money paid in premiums is forfeited.

Source:

State Farm: Term Insurance

Insure Lane: Term Life Explained

Smart Money: Term or Whole Life?