conceptsTerm life insurance is the original form of life insurance and is considered to be pure insurance protection because it builds no cash value. This is in contrast to permanent life insurance such as whole life, universal life, and variable universal life.
Term life insurance is temporary, as it covers only a specific period of time, the relevant term. If the insured dies during the term, the death benefit will be paid to the beneficiary. Because the term expires the insurer often does not have to pay out making term insurance the most inexpensive way to purchase a substantial death benefit on a coverage per premium dollar basis.
Because term insurance is temporary in nature its primary use is generally to provide for covering temporary financial responsibilities of the insured. Such responsibilites may include but are not limited to consumer debt, dependent care, college education for dependents, and mortgages.
A Professor at one of the IIMs was explaining marketing concepts to the Students:
You see a gorgeous girl at a party. You go up to her and say: "I am very rich, marry me!" - That's Direct Marketing"
You're at a party with a bunch of friends and see a gorgeous girl. One of your friends goes up to her and pointing at you says: "He's very rich."Marry him." -That's Advertising"
You see a gorgeous girl at a party. You go up to her and get her telephone number. The next day, you call and say: "Hi, I'm very rich."Marry me - That's Telemarketing"
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