term insurance: meaning, definition, pronunciation and examples
C1Formal, Technical
Quick answer
What does “term insurance” mean?
A type of life insurance policy that provides coverage for a fixed period (term), paying out only if the insured person dies within that term.
Audio
Pronunciation
Definition
Meaning and Definition
A type of life insurance policy that provides coverage for a fixed period (term), paying out only if the insured person dies within that term.
A temporary insurance contract with no cash value or investment component, offering pure financial protection for a specified duration, often chosen for its affordability compared to whole life insurance.
Dialectal Variation
British vs American Usage
Differences
The concept and term are identical in both markets. Minor spelling differences may apply in related documents (e.g., 'policyholder' vs. 'policy holder').
Connotations
Primarily a financial/insurance product term with no regional connotative differences.
Frequency
Equally common in both UK and US financial contexts.
Grammar
How to Use “term insurance” in a Sentence
[Subject] has/takes out/arranges term insurance (with [Provider]) (for [amount]) (over [duration])Term insurance (on [person]) (covers [beneficiary]) (for [duration])Vocabulary
Collocations
Examples
Examples of “term insurance” in a Sentence
verb
British English
- We should term-insure ourselves for the duration of the mortgage.
- He is term-insured for £250,000.
American English
- They decided to term-insure the primary breadwinner.
- The company term-insures its key executives.
adjective
British English
- He reviewed his term-insurance policy documents.
- A term-insurance quote was provided.
American English
- She has a term-insurance product from a reputable firm.
- Term-insurance premiums are often lower.
Usage
Meaning in Context
Business
Common in financial planning, employee benefits, and risk management discussions.
Academic
Used in economics, actuarial science, and finance courses discussing insurance products and risk.
Everyday
Used when discussing personal finance, family protection, or mortgage arrangements.
Technical
A precise actuarial and financial services term with defined legal and regulatory parameters.
Vocabulary
Synonyms of “term insurance”
Strong
Neutral
Weak
Vocabulary
Antonyms of “term insurance”
Watch out
Common Mistakes When Using “term insurance”
- Using 'time insurance' (incorrect). Forgetting the hyphen in adjectival use: 'a term-insurance policy'. Confusing it with 'travel insurance' or other types of temporary insurance.
FAQ
Frequently Asked Questions
The coverage ends. If the insured person does not die during the term, no payout is made, and the policy has no residual value unless it includes a rare 'return of premium' feature.
Yes, typically it is significantly cheaper for the same amount of coverage because it has no investment or cash-value component and only pays out if a death occurs within the term.
Many policies offer a renewal option at the end of the term, but the premiums will be recalculated based on your older age and health at that time, making it much more expensive.
In level term, the payout amount (sum assured) stays the same for the entire policy. In decreasing term, the payout amount reduces over time, often used to match a declining debt like a repayment mortgage.
A type of life insurance policy that provides coverage for a fixed period (term), paying out only if the insured person dies within that term.
Term insurance is usually formal, technical in register.
Term insurance: in British English it is pronounced /tɜːm ɪnˈʃʊərəns/, and in American English it is pronounced /tɝːm ɪnˈʃʊrəns/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “It's like buying term insurance for your mortgage.”
Learning
Memory Aids
Mnemonic
Think of a school 'term' – it lasts for a set time. 'Term insurance' is insurance that lasts for a set time.
Conceptual Metaphor
INSURANCE IS A TIME-LIMITED SHIELD.
Practice
Quiz
What is the primary characteristic of term insurance?