Let's say that on your job you frequently have the task of sending a fax to another company. You always need a cover page for the fax. You could spend the time and create this page in Word every time. Or you could use a fax cover sheet that Word already contains.
You will find this, and other templates, among Word's installed templates. The picture gives you an example. The template is set up so that it's simple to complete. Just fill in the blanks with your information, print the sheet, and fax it. Even if you have to add something to the sheet, or delete another part, the essential content is there already; you needn't build it from the ground up.