How long does a life insurance last?

Answer 1

It depends on nature of the product.

Term insurance for example, lasts a stated period of years. You can select a product with the desired duration. There are also options pertaining to whether the face value of the policy remains the same or declines, and whether the premium (the periodic amount paid for coverage) remains level or increases as you age. A level premium policy generally costs more than one in which the premiums increase with age, but it provides additional predictability as to cost.

People often buy term insurance when they are raising a family and the need for the greatest death benefits exist (to pay for the care of their family if the insured dies prematurely). It is relatively inexpensive (depending upon health factors) and can be purchased in many dollar increments (for example, $50,000, $100,000 and more) Term insurance is purchased to secure the death benefit, and will terminate if the premium is not paid. It does not accumulate cash value. Sometimes the analogy is made that term insurance amounts to "renting" the policy.

The other major category of life insurance is "whole life", sometimes referred to as permanent insurance. Despite the term "permanent", it remains in force only as long as premiums are paid. However, unlike term insurance, part of each premium goes to slowly build "cash value", which is a store of value within the policy which becomes the property of the policy owner. There can reach a point in the life of the policy that premiums no longer have to be paid because enough cash value has accumulated to support the policy. As long as premium is paid, the policy becomes "fully paid up" at a specific point in time.