Jeff is a well-known speaker and expert in life insurance and financial planning. He has been featured and quoted in Nerdwallet, Bloomberg, Forbes, U.S. News & Money, USA Today, and other leading finance websites. He is a licensed life insurance agent and has helped over 3000 people secure life insurance. He is licensed in all 50 states & DC. Jeff has spoken at top insurance conferen...

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Benjamin Carr was a licensed insurance agent in Georgia and has two years' experience in life, health, property and casualty coverage. He has worked with State Farm and other risk management firms. He is also a strategic writer and editor with a background in branding, marketing, and quality assurance. He has been in military newsrooms — literally on the frontline of journalism.

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Reviewed by Benji Carr
Former Licensed Life Insurance Agent Benji Carr

UPDATED: Oct 14, 2020

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One of the major advantages with term life insurance is that you can quite literally create a policy tailored specifically to your individual needs.

You can take a policy only for as long as you need coverage.

And since term life is so much less expensive than whole life insurance, you can buy a lot more of it. That means you can get the coverage you need without breaking the bank.

One of the most popular policies is 10-year term life insurance.

It provides coverage for a very specific term and is often even less expensive than term policies of greater durations.

These benefits can enable you to afford even more coverage than you can get with other types of life insurance. Let’s explore the finer points of 10-year term life insurance.

What is a 10-Year Term Life Insurance Policy?

10 Year Term Life InsuranceAt its core, a 10-year term life insurance policy is exactly what the name implies – term life insurance.

This name is to differentiate it from whole life insurance, which is permanent life insurance.

A term life insurance policy will only last as long as the indicated term.

A term life insurance policy represents pure life insurance. That is, the only benefit of the policy is the payment of the face value upon your death.

Unlike whole life insurance, there is no cash value accumulation, and therefore no investment provision.

Should you die during the term of the policy, your beneficiaries will collect the death benefit. If you don’t, the policy will simply expire.

Term life insurance generally ranges between five years and 30 years, putting a 10-year policy on the shorter end of the range. But for many consumers, a 10-year policy is all that’s needed.

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The Benefits of a 10-Year Term Life Insurance Policy

Everyone needs a certain amount of life insurance throughout their lives. But there’s no doubt, there are times when you need more coverage than others.

Protecting Your Children

For example, let’s say you have two children, ages 14 and 12. Over the next 10 years, you’ll have a particularly high need for additional life insurance coverage.

Should you die within that timeframe, your children will still need to be supported. And there might also need to be some provision to pay for their college educations.

This is the kind of situation where a 10-year term life insurance policy can neatly fill a specific need.

Sure, you can take a longer term – 15 years, 20 years, or even 30 years, but it’s likely your need for coverage will decline 10 years from now.

There may be no point in paying the higher annual premium costs for the longer term policies, or carrying a large amount of insurance for longer than necessary.

Saving Money

Cost is another major factor. The shorter the duration of the term policy, the lower the premium will be. That’s because a shorter-term policy is less likely to result in a death benefit claim than a longer-term policy. That can be a money-saving opportunity.

For example, you may be able to get a $500,000 policy for $1,000 per year on a 20-year term.

But a 10-year term may offer the same death benefit with an annual premium of just $600. By going with the 10-year policy, you’ll save $400 per year or $4,000 over the first 10 years.

You can use the savings for other purposes, including saving and investing for the future. But you may also consider increasing the amount of the death benefit.

For example, if you can afford $1,000 per year, you may be able to increase the death benefit to $750,000 or even $1 million using a 10-year policy.

Who is a 10-Year Term Life Insurance Policy Best for?

In a perfect world, everyone would have permanent, whole life insurance sufficient to cover any potential contingency following their death.

But this isn’t a perfect world, and that type of policy can be prohibitively expensive, which is exactly why term life insurance policies have become so popular.

They provide the amount of coverage needed at a much more affordable rate. But why might you be specifically interested in a 10-year term life insurance policy?

People Concerned with Cost

As discussed earlier, a 10-year term life insurance policy is less expensive than longer-term policies. It’s a way to get an even lower premium on already low-cost insurance.

People Covering Specific Needs

It’s often beneficial to take a policy designed to cover a certain liability. For example, if you incur a significant amount of debt to start a new business, you may need additional insurance to cover those debts.

If the loans are expected to be paid off within 10 years, a 10-year term life insurance policy will cover them in a perfect match.

People Covering a Mortgage

If you’re five years into a 15-year mortgage, you may want to take a 10-year term life insurance policy to pay off the loan should you die before the end of the loan term.

10-year policies are perfect for covering intermediate financial needs.

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What to Consider When Buying a 10-Year Term Life Insurance Policy

So far we’ve been discussing the reasons for purchasing a 10-year term life insurance policy. But there are some limitations you need to be aware of.

First among them is the fact that if you need to renew your policy at the end of the term, the premium will be higher due to the fact that you’ll be older.

Another is the possibility of developing a health condition before the end of the term. Should that happen, the premium will be much higher, or you might even find you’ve become uninsurable.

Fortunately, there are ways you can customize a term life insurance policy to work around those limitations.

Renewable Term

Most term life insurance policies are renewable. At the end of the original term, the policy will typically have renewal provisions.

You may be able to renew into a new 10-year term, or it may be a reduced term, such as five years or even one year. You may even be able to select the renewal term at the time of application.

However it’s set, you’ll be able to renew the policy when the original term expires, even if there’s a negative change in your health status.

The premium will of course be higher, based on the fact that you’ll be older at the time of the renewal, but there won’t be a premium increase based on your health status.

Convertible Term Rider

This is a rider that will enable you to convert your term life insurance policy to a permanent, whole life policy.

You’ll usually be able to do this without any requirement for medical qualification, although the premium for a whole life policy will be higher than it will be for an equivalent amount of term life insurance coverage.

Like all insurance riders, the convertible term rider will increase your premium somewhat. But it may be a small price to pay for guaranteeing the option to get permanent life insurance at a later date, when you may be better able to afford it.

Return of Premium Rider

One of the disadvantages with term life insurance is the absence of an investment provision.

Once your policy expires, there’ll be no cash value, but you can at least partially offset this situation by adding a return of premium rider.

The rider will enable you to receive a refund of your premiums at the end of the term. If you paid $500 per year for 10 years, the insurance company will pay you $5,000 when the policy expires.

The insurance company can do this because they will have earned investment income on your premiums while the policy was in force.

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Final Thoughts on 10-Year Term Life Insurance

10-year term life insurance certainly isn’t for everyone. But it might be the right policy for you, based on your own individual circumstances.

An independent life insurance agent can help you find the right 10-year term policy for you – or any other type of life insurance policy – at a price you can afford, and with the custom features you need.

Start shopping today and find the best life insurance company for your needs.