There are many different types of term insurance:

Level term insurance
This pays out a set lump sum on death.

Increasing term insurance
This pays out a lump sum on death. The amount it pays and your premiums are increased each year or every few years, for example, in line with inflation.

Family income benefit Following death
this pays out a regular income for the remainder of the term. You can choose a level amount or an income which increases each year.

Decreasing term insurance
This pays out a lump sum on death, but the amount falls as the term progresses. This type of cover is used, for example, to protect a mortgage or other loan where the balance declines as you make the repayments.

Increasable term insurance
This pays out a lump sum on death which is initially a set amount. But you have the option to increase the cover, for example, each year or on the birth of a child. If you take up the option, your premium increases in line with the extra cover. The extra premium does not reflect any change in health - your state of health is assumed to be the same as it was when you first started the policy.

Renewable term insurance
This gives you the option, at the end of the original term, to extend the policy for a further term. The new premiums will be based on your age at the time you take up the option. But it does not reflect any change in health - your state of health is assumed to be the same as it was when you took out the original policy.

Convertible term insurance
This gives you the option to convert your policy from term insurance to another type of life insurance that has an investment element. The premium for the new policy will be based on your age at the time you take up the option and will be higher to reflect the investment element. But it does not reflect any change in health - your state of health is assumed to be the same as it was when you took out the term insurance.

You do not pay tax on lump sums or income paid out by term insurance policies.