One big advantage of term insurance is its cost in comparison to permanent insurance. Term insurance is cheaper because with term insurance, you're just paying for the death benefit.  Permanent policies, by contrast allocate part of your premiums for administrative fees such as policy loans cash value accumulation, death benefits and, in the case of variable life, investment charges.

For people who know that they need coverage for 30 years, or less, term insurance is often the right choice. For instance, buying a term life policy for 20 years to insure that you will be covered until your children graduate college would be an efficient way to buy term life insurance.   This way you only pay for the coverage you need.

Term insurance has its pitfalls.  The major disadvantage of term life is that it has a “term”.  If at the end of that term you realize that you still have a need for life insurance you could be faced with significant challenges.  Many policies will give you the option to renew your policy when you reach the end of the term. However, this will be at a much higher cost.  In most cases you will not have to go thru underwriting again, but you may not be able to afford the new higher premium.

Be careful when considering a term policy; make sure you carefully consider the length of coverage needed. If you're needs are truly temporary, then term insurance may be an excellent choice. If you think there's a possibility that you might need the coverage for a long time, then consider a slightly longer term plan i.e. a 20 year term plan instead of a 15 year.  If you are still uncomfortable with the thought of your life needs out lasting your term policy then you should consider a permanent plan.   Remember that the same factors that affect your premium costs today will affect your costs when you go to renew or buy a new policy 20 or 30 years from now: age, health status and family history.   

For those of you who like the idea of term insurance, but do not like the fact that your policy does not build up cash value, there is an economical term policy that may be right for you.  It’s called “return-of-premium” term insurance. If you keep the policy in force for the entire term, say 30 years, the insurance company will refund the premium payments you made over that 30-year period. On the positive side, you get insurance with cash build up at a substantial discount compared to permanent insurance. On the down side the premiums are considerably higher than premiums for standard term policies.  Another factor to consider is that if you drop the policy before the term policy has expired, you will have paid a higher premium for your coverage and the premiums you paid won't be refunded.