In short
Term life insurance pays out only if you die within a fixed number of years chosen at the start of the policy.
Term life insurance covers you for a set period, the term, such as 20 or 25 years. If you die during the term and the claim is valid, it pays the sum assured. If you outlive the term, the cover ends and there is no payout, and most term policies have no cash-in value.
The two main types are level term, where the sum assured stays the same, and decreasing term, where it falls over time. Term cover is the most common choice for protecting a mortgage or providing for a family while children are growing up.
Term cover is generally the most cost-effective way to buy a large amount of protection for a defined period. The right term usually matches the length of the need, for example the years left on a mortgage or until children are financially independent.
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