What is a 10-year term life insurance policy?

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states.
After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insu…

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Reviewed by

Rachael Brennan

Licensed Insurance Agent

UPDATED: Feb 25, 2022

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Here's the Scoop

  • 10-year term life insurance policies offer you affordable rates and no-lapse coverage
  • In certain situations, you can renew your 10-year term life insurance policy, or you can opt to create a new one
  • Several risk factors can impact your 10-year term life insurance rates, such as age and health condition

Many term insurance policies are available, but what exactly is a 10-year policy? What are the costs of 10-year term life insurance policies? Is it right for you?

We can provide you with all the answers to these questions. However, we also want to address certain risk factors that can impact your 10-year term life insurance policy. This includes age, health, and all of your basic coverage needs.

The good news is that you can choose a 10-year term life insurance policy that best suits your situation. We also encourage you to learn more about term life insurance so that you can identify and determine a policy that works best for you. Read on to learn more.

Table of Contents

What is a 10-year term life insurance policy?

A 10-year term life insurance policy is a life insurance policy with a set term length of 10 years, after which the coverage expires. 10-year term life insurance typically costs much less than whole life, or even policies with 20 or 30 year time periods.

You’ll pay a level insurance premium over the 10-year term, which will keep the policy in force. Insurance companies also can’t cancel your policy or increase your rates as long as you keep making timely payments.

At the end of the 10-year period, your insurance policy will naturally expire. However, in some situations, you can actually renew the policy, or you can choose to purchase a new one.

10-Year Level Term Life Insurance

The word level refers to your fixed insurance rate and the cash amount of the death benefit during a term life insurance policy. The death benefit refers to the money issued to beneficiaries if the insured individual passes away during the term of the policy.

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What are the benefits of a 10-year terms life insurance policy?

Having a 10-year term life insurance policy offers many benefits. Here’s what you can expect:

  • Planning for the unexpected. Having a 10-year term life insurance policy ensures that you can provide financial protection for your family. Keep in mind that a lot can change in 10 years, and it’s difficult to predict what’s going to happen.
  • Death benefit. As we discussed earlier in this article, the death benefit is when surviving family members receive a sum of money. The vast majority of term life insurance policies hinge upon a death benefit. If you were to pass away unexpectedly, a death benefit would provide relief for anyone who relied on you for economic support.
  • Affordable rates. 10-year term life insurance has the most affordable rates, but the price will also depend on the age and health of the policyholder. We encourage you to learn more about life insurance rates by age.
  • Duration of coverage. For many people, it simply makes more sense to limit their term life insurance plan to 10-years. For example, if you have multiple children who are approaching adolescence, 10-year term life insurance ensures that you can protect them until they are legal adults.

Depending on your situation, you can benefit immensely from having a 10-year term life insurance policy.

What can affect your 10-year term life insurance policy rates?

Life insurance companies have to assess certain risks, which will likely impact your insurance rates. Here are some of the risk factors that life insurance companies take into account:

  • Age. Generally speaking, older adults will spend will have to pay higher life insurance rates. Young people statistically are much more unlikely to pass away.
  • Health. If you take care of yourself and regularly make healthy life decisions, life insurance companies will consider you a low-risk policyholder. Life insurance companies will take a look at several risk factors regarding your health, such as your medical history, weight, and behaviors that affect your health, such as smoking.
  • Lifestyle. Life insurance companies will also consider risk factors that have to do with your lifestyle. This includes your driving history, criminal record, occupations, and financial outlook.

Buying life insurance young is the best way to lock in a low rate.

Who needs a 10-year term life insurance policy?

10-year term life insurance provides you with basic financial protection, and they also serve as a bridge for future life insurance policies. These types of policies are particularly appealing to young families who require more affordable insurance rates.

The beauty of a 10-year term life insurance policy is that it allows you to take some time to improve your financial situation down the road. Also, if you’re still young and healthy, this gives you time to consider whole life insurance.

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What are the risks that a 10-year term life insurance policy covers?

10-year term life can also help you manage risks and plan for a future in which you achieve financial security. For example, let’s say you have 10-years left to pay off your mortgage. A 10-year term life insurance policy ensures that your family can pay off the house if you were to pass away unexpectedly.

Debt is another financial risk that should make you consider when purchasing 10-year term life insurance. It’s a viable strategy that allows you to resolve and pay off everything that you owe.

10-year term insurance also gives you a buffer to make any necessary health changes before you sign up for whole life insurance.

The Bottom Line for 10-Year Term Life Insurance

When you begin searching for 10-year term life insurance, make sure that the policy suits all of your basic needs. It’s important to understand why you need it and how it’ll benefit you.

The truth is that having a short-term life insurance policy can provide you and your family with financial protection for the immediate future. However, we also encourage you to look into whole life insurance.

10-year term life insurance is also incredibly affordable, but certain risk factors (age, weight, lifestyle) can affect your rates. Also, the insurance companies can’t increase your rates or cancel your policy at any time.

Keep in mind that you can always search for 10-year term life insurance quotes to find a rate that agrees with your current budget.

Take some time to assess your situation — consider your current needs and if having a 10-year term life insurance makes sense for you. Many of the top insurance companies can provide you with a plan that makes the most sense for you and your family.

We also advise that you make use of our comparison tool for free quotes from the top life insurance companies. Simply enter your ZIP code and begin browsing through the results.

Frequently Asked Questions Regarding 10-Year Term Life Insurance

Below are some of the questions that we commonly receive regarding 10-year term life insurance policies along with the answers:

#1 – Do you have to undergo a medical exam when signing up for a 10-year term life insurance policy?

All medical exam requirements depend on the life insurance company evaluating your case. Medical exams also depend on the size of your policy and the features you want to include in it.

#2 – How much does 10-year term life insurance cost?

The cost of your 10-year life insurance policy will depend on several variables, but it’s usually affordable for most people. For example, the average 30-year-old non-smoker will pay around $15 per month for a 10-year term life insurance policy worth $500,000.