Term life insurance is a type of life insurance policy that provides coverage for a specified period, typically ranging from 1 to 30 years. Term policies only pay out a death benefit if the insured individual dies during the term of the policy. Once the term of the policy expires, the coverage ends.

There are two main types of term life insurance policies:

1. Level Term Life Insurance: This is the most common type of term life insurance policy, which provides a fixed death benefit for the entire term of the policy. The premium remains the same for the entire term of the policy.
2. Decreasing Term Life Insurance: This type of policy has a death benefit that decreases over time, usually annually or monthly, while the premium remains the same. Decreasing term policies are often used to cover specific liabilities that decrease over time, such as a mortgage or other debt.

Advantages of term life insurance:

1. Affordability: Term life insurance is often more affordable than permanent life insurance policies, making it a good option for individuals on a budget.
2. Flexibility: Term policies can be purchased for a specific period, allowing individuals to tailor their coverage to their specific needs.
3. Simplicity: Term policies are straightforward and easy to understand, making them a popular choice for individuals who want a simple insurance solution.
4. Convertibility: Many term policies are convertible, which means they can be converted to a permanent life insurance policy without a medical exam or new underwriting.

Limitations of term life insurance:

1. No cash value: Unlike permanent life insurance policies, term life insurance policies do not have a cash value component.
2. No lifetime coverage: Term policies provide coverage for a specific period only and do not provide coverage for the entire life of the insured individual.
3. Premium increases: After the initial term of the policy ends, the premiums for renewed policies may increase, making the coverage more expensive.
4. Limited use: Term policies may not be suitable for individuals with complex estate planning needs or those who want to use life insurance as a tax-advantaged savings vehicle.

In summary, term life insurance is an affordable and flexible option for individuals seeking life insurance coverage for a specific period. While it may not be suitable for everyone, it is an effective solution for many people's life insurance needs.