The following is a chart of the best term life insurance rates by age based on the best health rate class for a 10 year term life policy.
Finding the best 10 year term life insurance rates is not always as easy as applying for the company that offers you the lowest quote.
Since 10-year term life insurance policies tend to have a very attractive price point, we wanted to take a moment and discuss some of the pros and cons of purchasing such a policy so that you don’t find yourself regretting your decision later on down the line.
But before we dive into all the nitty-gritty details of a 10-year term life insurance policy, let’s first take a look at some sample rates from a few of the top-rated life insurance companies you’re likely to encounter while shopping for coverage.
Ok, so now that we’ve had a chance to look at some sample rates, let’s now go over some of the most common questions we get from our clients as well as address some of the most common issues people will can run into when only purchasing a 10-year term life insurance policy early in life.
Questions that we’ll be examining will include:
- Who needs a 10-year term life insurance policy?
- How does one qualify for a 10-year term life insurance policy?
- What happens after I’ve owned my policy for 10 years?
- Examining options when a 10-year term life insurance policy expires.
- Guaranteed renewable term life insurance policies.
So, without further ado, let’s get started!
Who needs a 10-year term life insurance policy?
A 10-year term life insurance policy may be suitable for someone who needs temporary life insurance coverage for a specific period of time.
For example, a person who only has a few more years left on their mortgage may want to get a 10-year term life insurance policy to ensure that the mortgage will be paid off in the event of their death.
Similarly, a person with young children may want to get a 10-year term life insurance policy to ensure that their children will be financially taken care of if the parent dies before the children are grown (assuming that the children aren’t too young in which case a 10-year term life insurance policy may not be long enough).
Other people who may consider a 10-year term life insurance policy include:
- Business owners who need to ensure that the business will be able to continue operating in the event of their death
- People who are concerned about paying off debt within a specific time frame
- People who are planning to retire within the next 10 years and want to ensure that their family will be financially secure in the event of their death.
Or anyone who has someone that is financially dependent upon them, who would suffer financially in the event that they were to pass away within the next 10 years.
How To Qualify For These 10 Year Term Life Insurance Rates
The top life insurance companies in the U.S. have various underwriting criteria to determine what health rating an applicant can qualify for.
These life insurance health ratings are multi-factorial, meaning there are a lot of variables that go into determining what health rating an underwriter will assign to an applicant.
Life Insurance Health Ratings include:
- Preferred Best or Preferred Plus
- Standard Plus
- Substandard or Table Rated
- Preferred Tobacco
- Standard Tobacco
There are other variables that an underwriter will consider. For example, dangerous hobbies and occupations are looked at. If you skydive, rock climb, or fly a Cessna, your life insurance health rating will most likely be affected.
Underwriters also give healthy credits for applicants who meet certain health criteria.
For example, people with well controlled blood pressure or great cholesterol ratios, can get a healthy credit that raises their health rating up one or two rate classes, based on each individual company’s underwriting criteria.
What happens after I’ve owned my policy for 10 years?
If you have owned a 10-year term life insurance policy for 10 years and the term has not yet expired, there are a few different options you may have:
- Renew the policy: Some 10-year term life insurance policies can be renewed for an additional term, although the premiums may be higher than they were during the initial term.
- Convert the policy: Some term life insurance policies can be converted to a permanent life insurance policy, such as whole life insurance, without the need for further underwriting. This option may be attractive if you want to continue to have life insurance coverage after the term of the policy expires, but it is generally more expensive than a term life insurance policy.
- Let the policy expire: If you no longer need life insurance coverage or do not want to pay the higher premiums that may be associated with renewing or converting the policy, you may choose to let the policy expire.
Examining options when a 10-year term life insurance policy expires.
As stated above, when a 10-year term life insurance policy expires, an insured will generally have three options: Renew their policy, convert their policy, or allow their policy to expire.
Unfortunately, though, sometimes individuals won’t be able to renew or convert their 10-year term life insurance policy. Or sometimes, they may be able to renew/convert them, but the new price is simply to expensive.
This is why we want to take a moment and discuss the potential “pitfalls” that can occur when an insured chooses to purchase a 10-year term life insurance policy, without thinking about what might happen 10 years from now when that policy expires.
Potential negatives one might encounter when renewing a 10-year term life insurance policy.
One of the biggest potential negatives you might encounter when trying to renew a 10-year term life insurance policy is that the price that you pay for your new policy will be significantly higher than what you were paying for your original 10-year term life insurance policy now that you are ten years older.
The second problem…
You’re likely to run into is that you might not be in the same physical shape as you were ten years earlier. You may have gained a few pounds, your cholesterol and/or blood pressure may not be where it once was or you may have even been diagnosed with a more serious pre-existing medical condition that could prevent you from even being able to qualify for coverage at all!
This is why, sometimes choosing to purchase a less expensive 10-year term life insurance policy when you really need to own 15, 20 or even 30 years of coverage isn’t always the right choice.
Potential risks of converting a term life insurance policy into a permanent life insurance policy.
There are several potential negatives to converting an expiring term life insurance policy into a permanent life insurance policy.
Some of these include:
- Cost: Whole life insurance policies tend to be more expensive than term life insurance policies. This means that you may have to pay a higher premium to maintain your coverage if you convert your policy.
- Reduced coverage: If you convert your policy, you may not be able to get the same level of coverage as you had under your original term life insurance policy. This is because whole-life insurance policies often have lower coverage limits.
And depending on the policy that you originally purchased there may be limitations restricting “when” you can convert your term life insurance policy. Such restrictions could prevent you from being able to convert your policy in its final days, weeks, or even years.
Guaranteed Renewable Term Life Insurance Policies
The last topic that we wanted to take a moment and briefly discuss is one that is often just briefly mentioned when discussing most term life insurance policies which is a “guaranteed renewable clause” that many term life insurance policies will contain.
And while we are a huge proponent of this benefit to policyholders, it’s important to understand what they are, how they work, and their limitations.
Guaranteed Renewable Term Life Insurance Policy:
A guaranteed renewable term life insurance policy is a type of term life insurance policy that allows the policyholder to renew their coverage at the end of the policy term without the need for a medical examination. The insurer is required to offer the policyholder the option to renew the policy, as long as the policyholder continues to pay premiums on time.
One of the main benefits of a guaranteed renewable term life insurance policy is that it provides the policyholder with long-term protection without the need for ongoing medical underwriting. This can be especially appealing to people who are concerned about the possibility of being denied coverage due to changes in their health status.
However, it’s important to note that while a guaranteed renewable term life insurance policy can offer some security, it is not the same as permanent life insurance. The premiums on a guaranteed renewable term life insurance policy will generally increase each year and will likely increase SIGNIFICANTLY over time.
Which means that…
At the end of your 10-year term life insurance policy, if you still need to own a life insurance policy, and you are not able to qualify for a new term life insurance policy instead of simply utilizing a guaranteed renewable feature to your expiring policy, you will likely need to spend double or more in your current premiums to keep your existing life insurance policy in effect. Additionally, this cost will continue to increase each and every year to the point where you may no longer be able to afford to keep your coverage in place.
It’s true that many term life insurance policies will offer a guaranteed renewable feature to them, if you can’t afford to pay the premium that the insurance company is going to charge you to renew your policy, is it really “renewable” for you?
And there you have it, our breakdown of a typical 10-year term life insurance policy with all of its pros and cons for you to consider. Now, we’ll be the first to admit that we have covered quite a bit here in a very short period of time, the good news is that we’re here to help. Our goal is to help you find the very best coverage for you and your family at the very best price.
So, when you’re ready, give us a call, and let us show you what we can do for you!