Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. It is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. An insurer, or insurance carrier, is a company selling the insurance; the insured, or policyholder, is the person or entity buying the insurance policy.
The amount of money to be charged for a certain amount of insurance coverage is called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
Term insurance is a type of life insurance policy. It can be defined as a life cover for a certain period of time or term. Term insurance policy is the cheapest plan because it does not have any cash value. This policy can be beneficial only if the policy holder dies within the term or before completing the time interval of the policy.
One can avail term insurance for 10 to 30 years. This policy comes with a feature that it can be converted to a permanent life insurance policy at any point of the policy term.