How it works
You choose an amount and a length — commonly ten, twenty, or thirty years. If you die during those years, the policy pays that amount to the beneficiaries you named, subject to the terms of the contract. If you outlive it, nothing is paid and nothing is returned. Death benefits are generally not treated as taxable income, but I am not a tax advisor and your situation may differ — ask yours.
That expiry is the reason it costs a fraction of permanent coverage. It is also the reason the length matters more than most people expect: the term should outlast the obligation you bought it for.
Picking the length
A short bridge — a business loan, the last stretch of a mortgage, a gap before other coverage begins.
The common answer for a family with young children. Long enough to carry the household to the far side of college.
A thirty-year mortgage taken in your thirties, or a late-arriving second family. Costs more, and removes the question.
Against the other two
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| Term | Whole | IUL | |
|---|---|---|---|
| Lasts | 10–30 years | Lifetime | Lifetime, if funded |
| Premium | Level, lowest | Level, highest | Adjustable |
| Cash value | None | Guaranteed, slow | Index-linked, capped |
| Needs watching | At renewal | Rarely | Yearly |
A summary, not a quote. Actual features, costs, and guarantees are set by the carrier and the policy you're issued.