What is term life insurance and how does it work?

Let me explain with an example.

Person A goes to insurer B and agrees to pay a premium of Rs. 10,000/- every year for the next 25 years and B offers an insurance policy worth Rs. 20 lakhs to A in return.

Every year A would pay the premium without fail

Assuming, anything happens to A within these 25 years, B would pay the agreed upon sum of Rs. 20 lakhs to A's family and the policy would end.

If A outlives the policy and is health after the 25 years, B's obligation to provide life insurance is over. Whatever money A paid in the past 25 years is gone.

This is how a Pure term insurance policy works.