A term life insurance policy provides pure death benefit protection, meaning that the death benefit will only be paid to the beneficiary if the insured dies during the term of the policy. The outcome is a lower likelihood of an insurer having to pay a death benefit. For this reason, term life insurance rates tend to be the lowest among all life insurance policies. Because the term expires, the insurer often does not have to pay out reducing the price of premiums and making term insurance an inexpensive way to purchase a substantial death benefit. The reason the price of premiums are substantially different is that term programs potentially expire without ever paying out, while permanent programs do not terminate until the insured dies and will thus always pay out.

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