Term Life Insurance
Term life insurance can be thought of as temporary or "rented" insurance. It will pay a death benefit only as long as the term of the policy is running. For example, there are many people who have a Term 20 or Term 30 policy while they are young. This provides a death benefit that will
- Pay off the house
- Provide for a spousal income
- Leave money for children's education
- Pay final expenses
- Clear out any outstanding debt
Once the house is paid off and the children are out of the house, there is not as much need for the term life insurance. Usually by that point they have built up a nest egg to provide for the spousal income.
Many term policies allow you to convert some or all of it to permanent insurance prior to the end of the term without proof of insurability. You can also continue it on a yearly basis after the term. This is very expensive and would only be done if you were terminal.
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