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.
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.
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.
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.
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.
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.
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 al