10 Year Term Life Insurance: Who Needs It?

Do you know what 10 year term life insurance is?

If you have dependents, financial liabilities or business interests, I’m sure you either have life insurance or are considering it.

…and if you’re not THINK AGAIN!  Ladies and gentlemen, no one ever PLANS to die.

The tricky thing is, with so many choices, you might find it difficult to pinpoint which type of policy is best for your circumstances.

Let’s take a look at what a 10 year term life insurance policy has to offer now.

​What Does 10 Year Term Life Insurance Mean?

Term Life insurance pays your beneficiaries a set amount of money as a death benefit in the event you die within a specific period of time.

When you’re in the market for term life insurance, it’s very important to GET REAL about your liabilities and responsibilities.

Seriously!

It’s way too easy to underestimate what your family or business partners will need to carry on as per normal.

So sit down with a pen and paper and be HONEST.

This will enable you to select the appropriate coverage amount and term.

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Terms range from 5 – 30 years and you should only select as much as you need.

So simply put, 10 year term life insurance covers you for a 10 year period. It’s not rocket science.

Basically what happens when you apply for a policy is the underwriter reviews your case and decides what the risk is for covering you for a specific period and then they assign a monetary value.

This figure is then split into monthly premium payments that are guaranteed to remain level for the set term.

There’s a lot to be said for knowing what your payments will be for a specific period.  No matter what your health is, they won’t escalate, which gives you peace of mind.

I bet you’re wondering what happens at the end of your term.

Well depending on your policy, you will have the opportunity to renew or convert it into a universal life or a whole life insurance policy.

That all depends on your specific needs and the agreement you made with your life insurance company. Be sure to speak to an independent agent.

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What Does a 10 Year Term Life Insurance Policy Cover?

Term Life Insurance is the most basic form of life insurance, and, in my opinion, the right pick for almost everyone.

YES – there is a time and place for whole life insurance, but that being said it’s not for 90% of you who are Googling life insurance.

There are many reasons why you would select 10 year term life insurance, and we are going to explore them right after we determine what your financial needs are. (For more information, read our “What is a 10-year term life insurance policy?“).

Honest Number Crunching Will Reveal Your Needs

The number crunching I suggest above will reveal how long you need coverage for and what the face value should be to give your loved ones or business partners the protection they deserve.

The longer the term and the more coverage you have, the costlier your premiums will be.

I created a great calculator to help you figure out how much life insurance you should have.

Take a look!

Who Should Buy a 10 Year Term Life Insurance Policy?

There are many reasons you might consider purchasing 10 year term life insurance.

To be honest, that’s the best part of term life insurance. It’s flexible, and it bends to suit your personal needs.

I’ve sold 10 year term life insurance to clients in their 20’s, 30’s, 40’s and 50’s!

Remember, you don’t always need long-term coverage.

Periods of time may crop up where a decade provides more than enough security to suit your situation.

1. Buy 10 Year Term Life Insurance Instead of Mortgage Insurance

If you just bought a home, you know that lenders require you to purchase insurance to cover the mortgage.

Many lenders sell mortgage insurance to their clients.

It sounds like a great idea, right? If something happens to you, your mortgage obligations won’t weigh your family down.

Unfortunately, it’s not as simple as that. Mortgage insurance is a decreasing form of term life insurance.

Read more: What is decreasing term life insurance?

The coverage corresponds to the amount you owe.

As your mortgage is paid down, your coverage is decreased accordingly.

…and that’s not all. Often the bank is the beneficiary, not your family.

Hmmm, this is looking a lot more like protection for the lender than for you.  If that’s what you’re thinking, you’d be right!

Mortgage insurance is also more expensive than term life insurance, and the underwriting occurs post claim.

Which means that there is a possibility that you aren’t covered at all! If they find out that you had a health condition that wasn’t disclosed when you got the policy (whether you knew about it or not) your claim could be denied.

So why the heck would you choose it!??

My advice is DON’T!

“The main reason for not buying the MPI is the cost,” says Bakul Modi, an insurance adviser at Protection from Life in the Raleigh-Durham, N.C. area. “It typically offers a declining amount of coverage for a cost that is higher than a term policy. You can get level term protection for a lower cost with term insurance.” Why You Don’t Need Mortgage Protection Insurance, Investopedia 

…Term Life Insurance is a Cheaper and More Flexible Option

Why not opt for 10 year term life insurance?

This decision hinges on the length of your mortgage and personal circumstances. If you have a lot of money down on your house, this may be just the option you’ve been looking for.

If however, you have a 20-30 year mortgage, I would suggest going for a longer term. You could also layer life insurance policies to keep yourself from being over insured at the end of your mortgage.

2. 10 Year Term Life Insurance When You Can’t Afford Anything More

10 year Term Life Insurance is very popular – probably because it’s ​VERY affordable.

A lot of my clients are worried about how they are going to fit life insurance into their financial planning.

If you have a lot of obligations, there may not be a ton of wiggle room in your budget for life insurance.

To be frank, that’s EXACTLY when you need life insurance. If things are that tight, your family is close to the edge.

Should your income suddenly cease to exist what would happen to them?

​10 years of life insurance coverage is better than nothing, and once you have a policy, there are more options when the term expires.

Yep! Some Good News

The great news is, once you have life insurance it’s renewable. This means that you will be able to maintain your life insurance despite any downturn in your health!

YES, the premiums will be higher because you are older, but you won’t need a medical exam to move forward. If you’re sick, need the life insurance and can meet the payments you will still be covered.

This is worth a lot if you are in a bad spot medically.

It’s also likely that your life insurance policy is convertible. Most policies allow you to convert your term life policy into permanent coverage, and often without the need for a medical examination.

However, you should always confirm these details with your life insurance agent.

3. 10 Year Term Life Insurance May Be Appealing When You’re Older

I sell a lot of 10 year term life insurance policies to people who are close to retirement.

For example, I have one client who is putting her daughter and son through graduate school.

Her daughter was lucky enough to be admitted to an ivy league university, and her son is attending culinary school in California.

She and her husband are responsible for their educational loans.

They’re concerned about something unforeseen happening so they purchased a 10 year term and made their son and daughter beneficiaries to cover any outstanding obligations that would be left behind. JUST IN CASE.

This is a true gift! If you have a short term obligation that needs coverage, 10 year term life insurance is the way to go.

• How to Use Life Insurance to Fund Your Retirement

4. 10 Year Term Life Insurance to Cover Business or Other Short Term Loans

Businesses need to be financed. Quite often liquidity comes in the form of a loan.

If you borrow money for buildings, merchandise, equipment, etc. you should consider covering the period of the loan with life insurance.

To be honest, most lenders require insurance to protect their interest anyway as it’s a great way for them to guarantee the money will be repaid.

5. To Supplement Your Current Life Insurance

What if you planned ahead and have 30 year term insurance in place?  But now that you’ve re-crunched your numbers, years later, that 250K policy you took out to cover your debts and mortgage is looking pretty weak.

….in a nutshell, things have changed. You started a new business and moved into a fab new beach house.

It’s been a while since you looked at that dusty old term policy – but now that you have, you realize that you’re VERY underinsured.

Ugh now what!?

I would tell this client to get real and sit down to figure out what their obligations are and how long they need the coverage.

For a lot of people, they only need a short term boost, and this is where 10 year term life insurance comes to the rescue.

It can add the coverage you need for 10 years and will fall away when you obligations lighten. That way you won’t be over insured.

Always Protect a Substantial Loan with Term Life Insurance

Whether a lender requires it or not, I would definitely protect any loan I took out with term life insurance. This is especially important if you want the business to survive your death.

The last thing you want is for your beloved company to be liquidated to satisfy your outstanding financial issues. Another great incentive would be to protect a partner from being overwhelmed by debt should something happen to you.

So my best advice is – if you take out a loan then you should take out some term life insurance.

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Let Us Help You Get the Best 10 Year Term Life Insurance Rates

If you are thinking about purchasing 10 year term life insurance, contact Huntley Wealth today!

We have over a decade of experience getting people the best possible rates

We specialize in high-risk life insurance, so if you have a preexisting medical condition, we’ve got ‘ya covered.

Our fantastic agents will find you the best possible rate for your particular circumstances.

Long terms aren’t for everyone! Maybe you have some goals that don’t require a 20 or 30 year term – or maybe you just need to notch up your coverage a bit.

Either way, we’ll crunch the numbers to find the best fit for you and your family. Call Huntley Wealth at 888-603-2876 today; we can help!

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