How term life insurance works Any life insurance policy that covers you for a specific, predetermined amount of time is a term policy. Should you die during your policy's term, your beneficiaries will receive the payment - should the policy expire before you do, there is no pay out.

Term policies are only insurance; they have no cash value or added savings feature.However, during the life of the policy, you may be able to secure loans using death benefit as collateral. Any such use of your policy will, however, diminish the death benefit until the loan plus interest is repaid.

Term life insurance policies are popular among consumers because of their affordability and flexibility. With a term life insurance policy, you choose the amount and duration of your policy's coverage.

Insurers typically offer term policies in increments of 5 years, up to a maximum of 30 years. Some insurers also offer annually renewable one-year policies.

Term policies usually feature a fully guaranteed rate that will not change over the life of the policy, but some policies may feature variable rates in return for lower premiums.

Insurers almost always require a medical exam for any type of life insurance. Some insurers will allow a policyholder to renew an expiring policy without benefit of a new exam, but this is not always the case. Most insurers will not extend a new term life insurance policy to applicants who are 70 or older.

Sidebar However, no medical exam is necessary in order to compare term life insurance quotes, and get advice tailored to your own specific situation. Visit Insweb, where you can get quotes in 30 seconds, and additional information if you submit your contact information. All for free, and with no obligation. Click here.

Is term life insurance right for you? Term life insurance is designed to offer basic coverage for a specific number of years at a fairly low cost. This makes it an especially attractive option for people who need to protect their beneficiaries, but who don't have a lot of cash freed up for the project.

When choosing your policy's term and benefit, you need to carefully consider your current financial and family situations. Most insurers will offer helpful tools to help you calculate your ideal policy size.

Who isn't a good match for a term policy? A life insurance policy can be used for any number of goals, from backing a business loan to enabling a charitable gift. If your goal is anything other than temporarily protecting loved ones against the financial hardship that would result from your death, you might want to look into a permanent policy.

But the most important thing to know . . . Is that comparing multiple term life insurance plans will almost always save you money. Annual premiums on the same coverage can vary up to 50% from carrier to carrier. And tweaking your coverage numbers just a little can affect cost too. For a slight increase in premiums, you could see a lot more in protection.

To accomplish all this at once, try Insweb, where you can shop several major insurers in your area all with one application.

For more help Not ready to shop quotes just yet? Read more about how term life insurance rates are set; or get tips on how to calculate your ideal amount of coverage.

For more help . . . Getting the lowest possible premium on your life insurance is almost like an art form. There are many variables to consider, and to get the right balance of term length, benefit amounts, and policy riders and illustrations, you need to take a careful step-by-step approach to the buying process.