What Does A 10 Year Level Term Life Insurance Policy Mean?
Term life insurance is a type of policy that provides a death benefit to your beneficiaries if you die while the coverage is in force. A 10-year level term life insurance policy is a type of term policy that guarantees fixed premiums for 10 years, regardless of any changes in your health. If you pass away during the 10-year period, your beneficiaries can collect a death benefit. Here are some things to keep in mind when considering a 10-year level term life insurance policy:
| Factors to Consider | Details |
|---|---|
| Coverage amount | The amount of coverage you purchase depends on your budget and financial goals. Consider covering expenses like mortgage balances, income replacement, funeral and burial costs, utility bills, groceries, education expenses, and outstanding debts. |
| Renewal or conversion options | You may be able to renew your policy or convert it to permanent life insurance at the end of the 10-year term. Renewal may be more expensive, and conversion may be unnecessary if you don’t need permanent life insurance. |
| Short-term needs | A 10-year term life insurance policy can make sense for specific situations, like planning for a new family member or covering short-term financial obligations like a debt. |
| Cost | The average cost for a 10-year term life insurance policy is $180 a year for $500,000 in coverage for a 30-year-old female. Your rate will depend on factors like your age, gender, health, smoking status, and the insurance company you choose. |
It’s important to choose a term length that matches the length of your financial obligations. While a 10-year term life insurance policy may be more budget-friendly than longer-term policies, planning to re-shop in 10 years can be risky if you develop a medical condition that could make new life insurance unaffordable. Shop around and compare policies from different insurers to find the best rates and coverage for your needs.
