November 23, 2022
  • November 23, 2022

What is 10 year term life insurance? – Forbes Advisor

By on October 4, 2022 0

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If you’re looking for simple, inexpensive life insurance, you might be considering term life insurance. Understanding how term life insurance works can help you decide if a 10-year policy is the right fit for your needs.

What is 10 year term life insurance?

Term life insurance is a contract between a policyholder and the life insurance company. In exchange for paying premiums, the insurer will pay a death benefit to your beneficiaries if you die while coverage is in effect.

How does a 10-year term life insurance policy work?

A 10-year term life insurance policy guarantees you lock in rates for 10 years, even if your health changes. If you die while the policy is in force, your beneficiaries may receive a death benefit.

When you choose a 10-year life insurance contract, you select:

  • Coverage amount, also called death benefit.
  • Beneficiary or the person(s) who will receive your death benefit.

The amount of coverage you purchase depends on your budget and financial goals. For example, if your goal is to make sure your home can be paid off if you die, consider buying enough coverage to cover your mortgage balance.

Similarly, if you want to ensure that your loved ones can manage their expenses after you lose your income, you can choose a death benefit that matches your income for a certain number of years. For example, if your income is $100,000 per year and you want to provide income replacement for 10 years, $1 million coverage may be appropriate.

If you die, your loved ones can use the death benefit to cover all expenses, including funeral and burial expenses, utility bills, groceries, college fees, or unpaid debts, such as a car loan or mortgage.

Related: How much life insurance do you need?

What happens after 10 years?

At the end of the 10-year life insurance term, the fixed premium period expires. Assuming you survived the policy, no death benefit will be paid to your beneficiaries. And you will not be reimbursed for any premiums paid.

This is typical of how term life insurance works, unless you purchase return of premium (ROP) insurance. With this type of policy, any money you paid in premiums is refunded tax-free if you survive the term. ROP term life insurance is available from life insurance companies including Cincinnati Life, State Farm Life and Vantis Life. Having a “premium refund” will cost a lot more than a regular term life insurance policy.

Can a 10-year term life insurance policy be extended?

At the end of your 10-year life insurance term, you may be able to renew your policy. But expect your premiums to increase significantly and continue to do so on a yearly basis. Renewing after the level term period is generally not a good option due to expense unless you have serious medical conditions, still need coverage and would not be able to purchase a new policy .

Another option is to convert term life insurance to permanent life insurance. Permanent life insurance is more expensive than term life insurance, but coverage generally lasts for life and can create cash value. If you don’t need permanent life insurance, it would probably be much more affordable to shop around for a new term life insurance policy.

Who is 10-year term life insurance for?

A 10-year term life insurance policy can be a great choice for someone who needs coverage for a limited time. For example, parents of school-aged children can purchase a term life insurance policy to ensure that their child’s education costs are covered in the event of their death. Or someone in their 50s may want a 10-year term insurance policy to cover the rest of their working years before retiring.

Here are four things to consider when choosing life insurance.


Your age will affect the cost of life insurance and the length of term you can buy. Ten-year term life insurance can be affordable even at older ages. However, if you think you need life insurance for more than 10 years, it is better to buy a longer term life insurance policy upfront.

Budget limits

The longer your level contract is, the more you will pay. A 10 year life insurance policy will be more economical than a 20 or 30 year term insurance policy. But it’s always better to buy a term that matches the length of your financial obligations, rather than planning to repurchase in 10 years. When you buy a term life insurance policy that lasts less than your actual needs, you risk developing a medical condition that could make new life insurance unaffordable in the future.

Short-term financial security needs

A 10-year term life insurance policy can be useful in scenarios where you have a specific situation that you want to plan for.

Suppose you and your partner want to start a family and one of you is considering taking a break from the working world. A 10-year term life insurance policy can ensure that the caregiver has an income if the working parent dies.

life changes

Major life changes, such as job loss, career change, or divorce, can have financial repercussions that may require short-term life insurance. If your partner is going back to school, for example, a term life insurance policy can ensure their financial security if you die before they return to work.

How much does 10-year term life insurance cost?

The average cost of a 10-year term life insurance policy is $180 per year for $500,000 coverage for a 30-year-old woman, according to Forbes Advisor life insurance rate analysis.

The amount you pay for life insurance will generally depend on several factors, including your age, gender, health, and smoking status. Here are the average life insurance rates for a 10-year term life insurance policy for different ages and genders.

Average 10-year term life insurance rates per year

Which companies have the lowest 10-year term life insurance rates?

Here are examples of annual 10-year term life insurance rates from some of the cheapest life insurance companies.

Cheap 10-year term life insurance for men 30-50

Cheap 10-year term life insurance for men 65-75

Cheap 10-year term life insurance rates for women aged 30-50

Cheap 10-year term life insurance rates for women 65-75

Related: Best life insurance for seniors

Is a 10-year term life insurance policy worth it?

A 10-year life insurance policy might be worth it if you only need coverage for a short time. Consider this type of life insurance if the financial obligations you want to cover are short term. For example, if you want to cover a debt for the next 10 years, a 10-year term life insurance policy might do the trick.

Compare life insurance companies

Compare policies with the 8 major insurers

10 Year Term Life Insurance FAQs

Do you have to pass a medical exam for a 10-year term life insurance policy?

Some insurance companies offer no-exam life insurance policies with 10-year terms. This means you can buy coverage without having to undergo a medical examination, which usually includes blood samples and height and weight measurements.

Is a 10-year term insurance policy more expensive for a smoker?

Smoking will result in higher life insurance quotes regardless of the length of the term.

Related: Life insurance for smokers

Can you cash in on a 10 year life insurance policy?

Term life insurance doesn’t accumulate cash value, so if you have a 10-year term life insurance policy, you won’t be able to cash it out.

Consider other forms of life insurance, such as universal life insurance, if you want to create cash value.

Related: Life insurance with cash value explained