A term policy is a type of life insurance that provides coverage for a specified period, or “term,” which can range from 10 to 30 years. During this time, the policyholder pays premiums and, in exchange, the insurer promises to pay out a death benefit if the policyholder dies within the term. If the policyholder survives the term, coverage typically ends without any payout or refund of premium dollars. Term policies are generally less expensive than whole life or universal life policies because they only provide coverage for a limited time and do not build cash value over time. They are often used to cover financial needs that will disappear in time, such as mortgage payments or college tuition costs.