How Does A Term Life Insurance Work? 
Term life insurance pays the face amount of the policy to the beneficiary , if the insured person dies during the years of the term . Many term life insurance policies have level premiums , which means that your premium will not go up during the years of the term . Many term life insurance policies also allow you to convert your term policy to permanent insurance if you convert it within a certain number of years . This means that you can change your temporary , term coverage to permanent whole or universal life that is rated the same as your term was rated , even if your health has declined . The premium for the permanent policy would be based on your age at the time of conversion . If the term policy is kept in effect past the term period , the premiums usually increase a lot and go up annually after that . Most people get a new term policy when their original term coverage ends . 