Ideally, your life insurance policy should last as long as your longest financial obligation. If you’ve done the math and realized you have just 10 years’ worth of financial obligations on your plate — like a mortgage or business loan — consider a 10-year policy. It’s also a popular option for people who are counting down the years until they retire.
A 10-year policy is a type of term life insurance. It lasts a decade, and the premiums stay the same for the life of the policy. If you die during the term, your beneficiaries will receive a payout from your insurer. But if you outlive the term, you’ll need to purchase another policy if you still need coverage — and your beneficiaries won’t get any money.
When your policy expires, so does your coverage. At this stage, there are a few options to choose from:
According to our research, a 30-year-old nonsmoking man with $250,000 in coverage living in Los Angeles, California can expect to pay around $20 a month, or $16 a month for a woman. The rates for a smoker are higher, typically from $43 a month for a man and $35 per month for a woman.
Your premiums are locked in for the life of the policy, so aim to take out a policy as soon as you need it to get the best possible rate. It’s worth comparing 10-year life insurance quotes from a range of insurers, too, as prices can vary significantly. The rate you’re ultimately offered is a reflection of a range of factors such as your age, health, lifestyle, occupation and medical history.
| Age | Man | Woman |
|---|---|---|
| 25 | $33.57 | $24.40 |
| 30 | $33.79 | $26.59 |
| 35 | $35.76 | $27.89 |
| 40 | $42.51 | $32.68 |
| 45 | $58.84 | $47.49 |
| 50 | $78.42 | $69.28 |
| 55 | $113.79 | $86.56 |
| 60 | $171.94 | $123.81 |
| 65 | $285.14 | $194.37 |
| 70 | $533.58 | $352.36 |
*Sample rates provided by Quotacy in 2019, and averaged from a subset of 12 life insurance companies.
The process is the same as purchasing any life insurance policy. Follow these steps:
Your life insurance policy should cover your longest financial obligation. So in short, a 10-year policy is suitable for anyone who has just a decade left of financial responsibility. It makes sense to purchase a 10-year policy in these situations:
It depends on your financial situation and where you are in your career. Ideally, your life insurance policy should cover your longest and most expensive financial obligation, or take you up until your retirement. That way, if you die before, your family won’t be responsible for your debts, and your policy will provide the income they need to live.
You might consider a different term length if you have more than 10 years left on your mortgage or until retirement. If you have a 15-, 20- or 30-year mortgage, look into a policy that covers those payments, such as a 20-year term or 30-year term. Remember, your debt doesn’t die with you, so if you die, your family will be responsible for making those payments.
Age is a life insurance carrier’s number one consideration. The reason for this isn’t a secret: The older you are, the more likely it’ll have to pay out your policy. In determining your rate, underwriters look at life expectancy data.
Let’s continue with our example of a 50-year-old policyholder. For the typical 50-year-old man, the risk of dying in the next 10 years is 7.35%. For the average woman, it’s 4.57%. To put this into context, a man who turns 65 today can expect to live until 84.3, while a woman is likely to live until 86.6. Keep in mind these are average numbers — around a quarter of 65-year-olds will reach their 90th birthday.
| Age | Man | Woman |
|---|---|---|
| 21 | 1.35% | 0.54% |
| 26 | 1.51% | 0.71% |
| 31 | 1.77% | 0.98% |
| 36 | 2.27% | 1.43% |
| 41 | 3.35% | 2.17% |
| 46 | 5.25% | 3.34% |
| 51 | 7.95% | 4.90% |
| 56 | 11.31% | 6.94% |
| 61 | 15.74% | 10.22% |
| 66 | 22.62% | 15.82% |
| 71 | 33.35% | 24.80% |
Typically, people purchase a 10-year policy with a specific purpose in mind, whether that’s to cover their mortgage and debts, secure a loan or plan for retirement. It’s great for short-term financial obligations and is budget-friendly enough to fit into most families’ financial planning.
Before signing off on a policy, compare life insurance policies to make sure your coverage will protect your family’s finances.
When should I opt for a term life policy?
There are two main reasons for choosing term life insurance. The first is to protect specific and temporary needs, such as paying off a loan, covering your kids’ college costs or replacing your income if you die before retirement.
All of these expenses have an end date, making term life an appropriate choice. The second reason for opting for term life is the price. It’s the cheapest type of life insurance on the market, and the premiums stay the same for the life of the policy.
Can an insurer cancel my term life policy if my health deteriorates?
No. A term life policy will stay in force as long as you continue to pay your premiums. And those premiums don’t change — even if the state of your health does. The only ways an insurer can terminate your personal policy is if you don’t make an overdue payment within the grace period, which is usually 31 days, or if it discovers you lied or submitted misleading information on your application.
How should I prepare for the medical exam?
The medical exam is a simple physical. The doctor will record your height, weight, blood pressure and pulse, and ask for a blood and urine sample.
For the best results, try to avoid caffeine, sugar, alcohol and over-the-counter drugs for 24 hours before the exam. On the day of, be sure to drink lots of water so you’ll be able to easily provide the urine sample.
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