How does term life insurance actually work?

Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. You pay a monthly or annual premium, and if you die during that term, your beneficiaries receive a tax-free lump sum called the death benefit. If you outlive the term, the policy simply expires with no payout and no return of premiums, unless you purchased a return-of-premium rider. Premiums are determined mainly by your age, health, coverage amount, and term length. Younger and healthier applicants pay less. Most policies require a medical exam, though some offer simplified or no-exam options at higher rates. Term life is generally the most affordable type of life insurance because it carries no cash value component, making it straightforward protection for a defined window of time.