What type of insurance is purchased for a specific period of time and provides high coverage for the cost?

Term insurance is purchased for a specific period, commonly ranging from one to thirty years, and is designed to provide high coverage at a relatively low cost compared to other types of life insurance. This is primarily because term insurance only pays a death benefit if the insured passes away during the specified term. If the term expires and the insured is still alive, no benefit is paid, and the coverage ends unless renewed.

The affordability of term insurance allows individuals to obtain higher coverage amounts for lower premiums, making it an attractive option for those looking to ensure their financial obligations (like mortgage or dependents) are met without incurring high costs. This distinctive feature of term insurance—as opposed to whole life or universal life policies, which combine a death benefit with a cash value component and have higher premiums—positions it as a suitable choice for temporary insurance needs. Therefore, the choice of term insurance aligns perfectly with the description of being high coverage for the cost over a specified period.