What type of policy provides coverage for a limited time but charges fixed premiums?

Term life insurance is designed to provide coverage for a specified period, often ranging from one year to several decades, and is characterized by fixed premium payments over that term. This type of policy is particularly suitable for individuals who have a temporary need for life insurance, such as covering financial obligations that diminish over time, like a mortgage or children's education.

During the term of the policy, if the insured passes away, the beneficiaries receive a death benefit. However, if the insured outlives the term, the policy usually expires without any payout. The fixed premium aspect means that the amount paid does not change during the duration of the policy, making it easier for the policyholder to budget for insurance costs.

In contrast, universal life insurance allows for flexible premium payments and has an investment component, making it more variable. Whole life insurance provides coverage for the insured's entire life, combining fixed premiums with a cash value benefit. Variable life insurance also includes an investment component and has flexible premiums, which means that the cost can fluctuate based on the performance of investments.