Which type of life insurance policy pays out only if the insured passes away during the term period?

Term life insurance is designed specifically to provide a death benefit if the insured passes away within a specified period, known as the term. This type of policy is straightforward: if the insured survives past the term’s expiration, no benefit is paid out, and the coverage typically ends. This makes term life insurance an appealing choice for individuals looking for affordable coverage to protect their beneficiaries for a certain span of time, such as during the child-rearing years or while paying off a mortgage.

In contrast, whole life insurance, universal life insurance, and variable life insurance policies include a cash value component and are designed for coverage over the insured’s entire lifetime, with benefits payable upon death at any point, rather than just during a specified term. Therefore, term life insurance is distinctively identified as the option that only pays out if the insured dies during the term period.