When Does Term Life Insurance Payout? 
Term life insurance pays out upon death of the insured person . Period . Since there is no cash value to term life insurance , you can not surrender the policy for cash , and it will not endow like Whole Life does . It costs less because it offers pure death protection without any investment feature . Therefore , it only pays out upon death of the Insured , as long as the policy is in effect at that time . 