Life Insurance

10-Year Term Life Insurance Explained

mother playing football with family
Generally speaking, life's biggest financial expenses aren't the kind to be paid off all at once. Instead, commitments like mortgages and other loans tend to take many years, even decades, before you can fully pay them off. Life insurance helps protect against some of the risks that come with these financial obligations.

Term life insurance policies are among the more commonly recommended and most affordable types of life insurance. But what is 10-year term life insurance? Here, we'll delve into the details and benefits of such policies. 

What is a 10-year term life insurance policy?

Term life policies are built with a preset duration, called the policy term. This duration determines how long the policy lasts. While it's often possible to renew a term policy, it's generally suggested to pick the length you expect to need. As the name implies, a 10-year term insurance policy is a term policy set with a ten-year duration. If the policyholder passes away during this duration, the policy will pay the benefit to the listed beneficiaries, provided the premiums have been paid. 

Keep in mind, however, that there's no payout if the premiums aren't paid or the duration ends while the policyholder is still alive. This scenario is one of the reasons that term life rates are often lower than other types of life insurance.

How does Ethos work?
Learn more about our quick and easy application process and how to pick the best policy for your family.

Can you cash out a 10-year life insurance policy?

Unlike some permanent life insurance policies, term life policies don't have a cash value component and therefore can't be cashed out. In some situations, however, term policies can have what's known as a conversion rider attached to them. This rider allows the policyholder to convert their term policy into a permanent life insurance policy. Ethos does not offer these riders, but we do have whole life policies for people ages 66-85. Although these whole life policies accrue value, because they are opened later in life, they won't gain significant value compared to a whole life plan purchased earlier in life. 

What happens at the end of a 10-year term life insurance policy? 

Term policies are designed to last for only a set amount of time. Unless renewed, the policy ends. When a policy is out of force, it's no longer active and can no longer make any payouts or collect premiums. If a policy is nearing expiration, it's sometimes possible to renew it. 

Your options depend on both the policy and the insurer. Although 10-year term life insurance rates are often fixed, these premiums can rise during renewal. 

Check your price for life insurance online with Ethos to see what your term life insurance rates could be.

Who is a 10-year term life insurance policy best for?

In general, people who have roughly ten years or less of important financial obligations may want to consider a 10-year term life policy. Even young families can benefit from a 10-year term policy in the right situations. 

Here are some more common examples of those who can merit by considering such a term policy:

  • Parents with kids in middle school

When your children are at this age, you can reasonably expect them to be financially dependent for at least ten more years. In this case, maintaining a 10-year term plan can help protect against your loss of income if you were to pass away. 

  • People within 10 years of retirement

Life insurance often serves as a component of retirement strategies. It can help protect your family or estate from financial hardships that can come from passing away before retirement. 

  • People with less than 10 years on their mortgage

Mortgages represent the biggest single purchase that most families will make in their lives. Taking out a life insurance policy to match the duration of your mortgage can help to offset the risk of losing your income before the mortgage is fully paid off.

  • Older individuals purchasing a new plan

If you're in your fifties or sixties and want additional life insurance coverage (or your first plan), a 10-year term plan may offer the most affordable premiums. Whole (permanent) life insurance almost always costs more than term life insurance. And because your risk of death is higher than a younger person's, a 10-year term plan poses less risk to an insurer than a 20 or 30-year term plan. 

Why choose a 10-year term life insurance policy?

There are many reasons to maintain a life insurance policy of any duration. Let's consider some specific, common themes behind some of the strategic ways people use life insurance:

  • Income replacement

Protecting a family from the loss of income from a primary earner is one of the more common uses of life insurance policies. 

  • Debt management

While debt isn't inherited, life insurance policies can be used to protect your estate from debt, thereby lifting the burden for your beneficiaries.

  • Children's education

Some parents maintain life insurance policies until their children have completed college to ensure that their education can be funded even if the parent(s) were to pass away.

  • Inheritance

Even if there are no debts or other financial obligations to address, it's possible to utilize a life insurance policy as a means of creating an inheritance for your beneficiaries. 

Applying for a 10-year term life insurance policy

It's quick and easy to apply for term policies with Ethos, and most people don't need a medical exam to do so. You'll only need to answer some health questions to help determine premium levels. Start applying today and find the best coverage for you.

Ready to get started?
Get a personalized quote in seconds.