Insurance Fundamental One Life insurance is first and foremost intended to provide financial security for individuals or entities that are dependent on someone else's continued ability to provide income. The need for continued financial resources can be for a fixed period, such as to pay a mortgage, discharge a business debt, or provide a college education for dependents. Or the need can be one that will last for an indefinite period. For instance, there may be a need to assure retirement income for a spouse, settle an estate, or guarantee that a business passes to one's heirs. Term insurance provides life insurance protection for a specified duration of time.
Permanent insurance is intended to last for a lifetime, regardless of when death occurs.
Each category of life insurance has its own unique advantages and disadvantages, and what may be appropriate for one individual can be totally inappropriate for another person. Term insurance can be compared to renting a death benefit, because it pays a benefit only if the insured dies during the period specified in the policy. If the insured is still alive at the end of the period, coverage ceases. One-year term life insurance policies are typically renewable on an annual basis. With this type of term insurance the coverage period is one year.