If the insured survives the time period, the policy expires. This means it has no cash value. However, some policies have a convertible feature permitting a policyowner to exchange a term policy for a cash value policy without evidence of insurability. Term is basically designed to provide a maximum amount of protection for a temporary period of time. Term insurance is ideal for families where protection is needed, but a minimum outlay of funds is necessary.
Term also works well as a supplement to cash value insurance.
Another common purpose of term insurance is to purchase it as protection against debts such as mortgages, auto loans or education loans. The purpose of variable life is to combine the protection features of life insurance with the investment potential of common stocks. The key to this sort of policy is that the death benefit is completely variable. These contracts do provide a minimum guaranteed death benefit. The actual death benefit could be higher depending upon the performance of the investment vehicle chosen.