When you’re shopping for life insurance, the different term lengths (like 10, 15, 20, 25, 30… years) can be a bit confusing.
And the truth is, most people’s assumptions about term lengths… are wrong!
In this review, we’ll cover how 10 year term life insurance works. We’ll also address Pros & Cons —both with OR without a medical exam— and provide some monthly sample rates.
What is 10 Year Term Life Insurance?
Most people assume if you’re buying a 10 year term plan, that the policy lasts for 10 years and then expires.
That is incorrect.
At most life insurance companies, the term length guarantees that —during the term— your premiums and the death benefit will remain constant (or fixed).
In other words, 10 year term life insurance offers you level payments and a level death benefit for a period of 10 years.
Pros and Cons of 10 Year Term Life Insurance
The biggest advantage to 10 year term is the low price.
Since it’s the lowest level term that most companies offer, it’s also the least expensive.
If you compare it to 20 year term, for example; the policyholder may own that policy for twice the length! There is a much greater chance the insured person will die in 20 years compared to 10.
Given that the life insurance company is at greater risk of having to pay a death claim, the price goes up.
The big downfall of 10 year term, then; is that the guaranteed low premiums only last for 10 years.
How Much Does 10 Year Term Life Insurance Cost?
The sample quotes below are for a 10 Year Term Life policy with $100,000 coverage (or “face”) amount.
Note: the rates shown are monthly and are based on “preferred best non tobacco” ratings, which you have to be in pretty good health to get. Getting these rates would also require a medical exam.
We are showing 10 year term rates by age, from 30 years old to 70 years old, which is the maximum “issue age” most companies will offer for term life coverage.
$100,000 10 YEAR TERM LIFE INSURANCE POLICY
| 100K 10 Year Term | Male | Female |
|---|---|---|
| Age 30 | $7.30 | $6.79 |
| Age 40 | $8.25 | $7.91 |
| Age 50 | $14.24 | $12.56 |
| Age 60 | $29.14 | $23.85 |
| Age 70 | $86.52 | $59.52 |
* Rates are estimates only and vary widely based on health, smoking status, family history of disease, driving history, and more. It is possible to estimate the costs for additional ages by averaging the costs of the two ages for a $100,000 10 Year Term Life Insurance policy, to get estimated rates for Age 25, Age 35, Age 45, Age 55, Age 65, and Age 75.
Medical Exam VS No Exam
Hands down, the best way to get low rates on life insurance is to take a medical exam.
This lets the life insurance company really get a good look into a current snapshot of your health, greatly reducing their risk.
Taking a medical exam is NOT a big deal. It takes about 30 minutes, it’s free; and it is done in the convenience of your own home.
On the downside, it can take longer (4-6 weeks) to be approved.
One thing you can do is get something called temporary insurance, so you have coverage while you wait. Then the waiting is no big deal either.
You can get coverage in a few days, if you go the no medical exam route.
If you just want quick and easy coverage, a no exam policy might be the way to go.
The BIG problem with a no exam option, is it tends to cost between 10% to 40% more than the fully underwritten option.
The good news? If you’re only looking for a 10 year term, your monthly rates are going to be quite low… either way.
However, just as a quick example:
Say you got a quote to pay $20 for a policy that requires you to take a medical exam AND a quote of $25 for a “no medical exam” policy.
You’re probably thinking: “Hey it’s only $5 bucks. I’ll just go the no exam route.”
And that is exactly what most people do. But, when you really think about it: that’s a 25% increase!
Long story short, when you’re shopping for life insurance —as is generally the case with most buying decisions— wanting something “quick and easy”… comes at a price.
Understanding Term Life Conversion
When considering any type of term life insurance, and especially 10 year term, you need to understand conversion priveleges.
Most term life insurance policies allow you to “convert” your term policy to a permanent life insurance policy (such as whole life insurance or universal life insurance) without a medical exam or any proof at all that you’re in good health.
Better yet, you get to keep your original health rating from when you bought your policy!
CONVERSION EXAMPLE:
In action, here’s what this looks like.
Say you purchased a 10 year term policy 9 years ago and now that your level term is expiring, you meet with your financial planner and decide that you should really need this policy for longer; maybe even your entire life!
But there’s a problem…
When you bought your policy, you were in excellent health and qualified for the company’s top health rating, preferred plus.
Unfortunately, you’ve let your health slip.
If you have a conversion feature, you could change your policy into a permanent plan that the life insurance company has available even if you’ve started smoking, had three strokes, and gained 500 pounds! That’s the beauty of conversion! You get to keep your original health rating from when you bought your policy without “evidence of insurability.”
Most companies offering 10 year term allow you to convert your policy throughout the entire term duration, unless you’re over 60 years old. That’s because some companies set an age limit of 60, 65, or 70 for when you can no longer convert a term policy, regardless of how long ago you purchased it.
Be sure to ask about the Conversion Feature, when purchasing any Term Life Insurance policy.
Have you ever shopped around for —or already purchased— a 10 Year Term Life Insurance policy?
Where did you shop? How was your experience?
Companies that Offer 10 Year Term Life Insurance
Deciding who the best company is really depends on what you’re looking for. We’ve provided a quick guide for you, here; but… always keep in mind: Life Insurance is NOT a “one-size-fits-all” product.
- Best for Price – Protective Life Insurance Company
- Most Lenient on Health Issues – Prudential Life Insurance Company
- Most Convenient/Fastest – Haven Life Insurance
- Best Conversion Privileges – AIG Direct
Additionally, we’ve prepared a comparison table showing sample quotes for “a healthy male, no medical exam 10 year term, $100,000 coverage“. The rates shown are monthly. As you can see, Haven tends to have the lowest prices.
$100,000 10 Year Term Life Insurance – Haven VS Ladder VS Bestow VS Ethos VS Fabric VS Sagicor
| Male | Age 30 | Age 40 | Age 50 | Age 60 |
|---|---|---|---|---|
| Haven | $8.38 | $9.46 | $16.66 | $37.60 |
| Ladder | $11 | $12 | $32 | $42 |
| Bestow | $9.58 | $11.67 | $17.67 | N/A |
| Ethos | $10 | $11 | $21 | $47 |
| Fabric | $15.13 | $16.93 | $23.27 | $39.49 |
| Sagicor | $8.34 | $9.70 | $17.28 | $40.17 |
The Bottom Line?
Let’s discuss your interest in 10 Year Term Life Insurance.
We can help you determine the best fit for you— based on your goals, your individual circumstances, and your budget.
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