What type of life insurance provides coverage for a specific period?

Term insurance is designed to provide life insurance coverage for a predetermined period of time, which can range from one year to several decades. This type of policy is particularly appealing because it typically offers lower premiums compared to permanent life insurance options. Policyholders pay premiums for the duration of the term, and if the insured passes away during that period, a death benefit is paid to the beneficiaries.

If the term ends and the insured is still alive, there is no payout, and the coverage ceases unless the policy is renewed or converted to a permanent policy, depending on the terms of the contract. This straightforward structure allows individuals to secure coverage to meet immediate financial protection needs, such as covering a mortgage, education expenses, or providing for dependents during their working years.

The other types of life insurance mentioned do not provide coverage solely for a specified period. Whole life insurance offers lifelong coverage with a cash value component, universal life provides flexible premium payments and death benefits, and endowment policies are designed to pay a benefit either on a specific date or upon the death of the insured before that date.