Term policies function similarly to other types of insurance policies you may carry, like car insurance; you pay money each month (for a certain period of time or term, hence the name), and if something bad happens—in this case, your early death—there’s a benefit paid out. Permanent life insurance, on the other hand, has an investment component and allows policyholders to accumulate a cash value.
When you buy a term policy, all of your premiums go toward securing a death benefit for your beneficiaries.