Life insurance is a financial safety net that protects families if a provider dies. A 10-year term life insurance policy provides financial protection for 10 years at an affordable price. The premiums are fixed and you have a wide range of coverage amounts to choose from.
Not only are 10-year term life insurance rates affordable, but the policy can be an ideal fit for many stages of life. Whether it’s to protect retirement plans or cover mortgage payments, there are a number of scenarios where a 10-year term policy is a smart choice.
Table of Contents
- How Much Does a 10-Year Term Life Insurance Policy Cost?
- Use Cases for a 10-Year Policy
- What Happens After the 10-Year Policy Expires?
How Much Does a 10-Year Term Life Insurance Policy Cost?
The monthly cost for life insurance can vary, but a 10-year term life insurance policy is one of the most budget-friendly options because of the length of coverage.
In the table below, we compare the monthly costs for $250,000 in coverage across various ages. Rates are for applicants in excellent health who don’t smoke.
10-Year Term Life Insurance Rates by Age
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Use Cases for a 10-Year Policy
A 10-year term life insurance policy is good choice many people, including:
- Couples with a home: It can help cover mortgage payments or pay off the house entirely.
- Young families: It can help cover credit cards, loans, daycare, and other living expenses.
- Families with older children: It can help cover tuition, weddings, and other financial milestones.
- Soon-to-be retirees: It can help ensure your loved one has the retirement they hoped for.
The four most common scenarios we see and will expand on are:
- Protecting your income
- Supplementing existing coverage
- Securing a loan
- Retirement planning
1. Use a 10-Year Term Life Policy to Protect Your Income
Buy a 10-year term policy if it’s all you can afford.
You may have a lot of bills. Maybe you’ve got credit card debt. You couldn’t possibly afford to buy life insurance now, right?
Wrong. It’s in situations like these when you need life insurance most and a 10 year policy can be extremely affordable.
Consider the following:
- If your income were to suddenly disappear, what would happen to your family?
- If you were already struggling financially, your death won’t make things easier.
- Final expenses—such as debt, medical bills, or your funeral costs—would be up to your family to pay.
A 10-year term policy can protect your income and your family’s future while you work toward paying off debt. Even if you can’t afford a large amount of coverage, would $100,000 of life insurance make a difference to your loved ones if you died unexpectedly?
In the table below, we compare the monthly costs for $100,000 in coverage across various ages. Rates are for applicants in excellent health who don’t smoke.
10-Year Term Life Insurance Rates by Age
A little bit of life insurance is always better than none at all.
2. Use a 10-Year Term Life Insurance Policy to Supplement Your Existing Life Insurance
Imagine you bought life insurance when you were 25 years old, right after your first child was born. You got a 30-year term life insurance policy with a $250,000 death benefit. Your premium is pretty low because you bought it when you were young and healthy.
Fast forward 15 years. You’re now 40 and you realize you need more coverage to account for your $400,000 mortgage, so that your family can keep the house if you pass away.
You have two options
- Buy a new life insurance policy for $500,000 that lasts for 30 years. But you might not need that much coverage for that long.
- Buy a new policy that lasts for 10 years and adds an extra $250,000 to your life insurance coverage. This makes your total coverage $500,000, which is enough to cover your mortgage.
We recommend option 2. This way, you are not paying for more insurance than you need, which is known as being over-insured.
» See what’s right for your needs and budget with our Life insurance needs calculator
3. Use a 10-Year Term Life Insurance Policy to Secure a Loan
Buy a 10-year term life insurance policy to protect a loan.
Whether you need to take out a personal or business loan, lenders need proof you can repay it.
They also like a back-up plan as assurance that they won’t lose money should you die unexpectedly before your loan is paid-in-full.
Lenders will be more inclined to approve your loan if you assign a term life insurance policy to guarantee payment even upon death.
4. Use a 10-Year Term Life Insurance Policy for Retirement Planning
Often, people buy term life insurance when they have big financial responsibilities. This is usually when their children are young and they have a large debt like a mortgage. But sometimes, people buy term life insurance later in life when they take on new financial responsibilities.
These can be things like buying a holiday home or helping to pay for their adult child’s further education. For instance, imagine you’re 55 years old. You and your partner buy your dream condo by the sea, a place you envision your kids and grandkids enjoying.
At the same time, one of your children is in college, which is expensive. You have some money saved and you’ll soon start receiving Social Security benefits. But you want to make sure that if something unexpected happens to you, your partner won’t have to sell the condo and your child can continue their studies.
This is why you might consider buying term life insurance even at this stage of life. It’s a way to ensure financial stability for your loved ones, even if you’re not around.
In the table below, we compare the monthly costs for various amounts of coverage. Rates are for 55-year-old applicants in excellent health who don’t smoke.
10-Year Term Life Insurance Rates for 55-Year-Olds
What Happens After the 10-Year Policy Expires?
Once the 10 years are over, your coverage ends and you stop paying premiums.
If an insured person dies while their term policy is active, their beneficiaries receive a death benefit check. If the insured person outlives the policy, no money is paid.
Many term life insurance policies have conversion and renewability options. If your term is set to end soon and you need more coverage, take a look into these options.
- Utilizing the conversion option means that you would be changing your term policy into a permanent one. Your premiums will increase significantly, however, you do not need to prove you’re still insurable. Even if you were to develop a serious condition, such as cancer, the insurance company would allow you to convert into the permanent plan.
- Utilizing the renewability option means you’d just be extending your same term coverage for one more year. Renewability premiums are much higher than your initial fixed premium.
If you have had no significant health changes while you owned the original 10-year term and you want more coverage, you may want to simply buy a new policy. Talk with a life insurance broker if you’re unsure which option is best for you.
Term life insurance is affordable and customizable. Unsure if 10 years is enough coverage to protect your loved ones? Other term length options include 15, 20, 25, 30, 35, and 40 years. Get a free quote instantly and apply online in minutes.
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Note: Life insurance quotes used in this article are accurate as of June 26, 2023. These are only estimates and your life insurance costs may be higher or lower.
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