What is term insurance plans?

Term insurance is one of two main categories of life insurance; the other is whole life insurance (sometimes called "permanent insurance"). The fundamental characteristic of term insurance is that it is designed to last for a definite period of time (the "term"). It affords a death benefit only, meaning that it pays its face value upon the death of the insured if the death occurs during the term of the policy. That is, if the person insured dies only after the policy has expired, no payment is made. It is also distinguishable from whole life insurance in that it does not accumulate "cash value". Cash value is similar to a savings account built into a whole life policy such that a portion of the premium is applied to paying for the death benefit and another portion applied to the cash value accumulation. However, the cash value portion should never be considered to be a savings account in the usual sense of that term. Likewise, all kinds of life insurance should be considered to be protection rather than investments.