A term life insurance policy is an agreement between you and the insurance company saying that if you pass away while the policy is active and in force, the insurer will make a lump sum payment (the “death benefit,” also referred to as the “coverage amount”) to the person or persons of your choosing (the “life insurance beneficiary”).

This money could be used to help replace your lost income and make debt payments in your absence. It could also include one-time expenses like funeral costs or other ongoing expenses after you’re gone.

Term life insurance, specifically, covers you during a certain time period, or term. If you had a 20-year term policy, for example, you'd be covered for that 20-year span. After that, your coverage would end unless you opted to buy another policy.