When it comes to purchasing term insurance, many people ask or debate how long of a term they need or desire. So, what’s the answer? Unfortunately, it is not that simple. Many factors go into deciding what length of a term life insurance policy fits you and your family’s needs. Some families have complex needs that can stretch a long duration of time. Other families have needs that will prove to be very temporary. Families also have differing levels of remaining free budget to work with.
The following 5 questions will help you decide if a 10 Year Term Life Insurance makes the most sense for your needs:
- What is Your Current Age?
- What is the Age of your Dependents?
- Are you the sole provider for your family?
- How Flexible is Your Budget?
- What are You Protecting?
5 Questions to Ask Before Purchasing 10 Year Term Life Insurance
Read the five questions below to ask yourself before purchasing this life insurance.
What is Your Current Age?
Your current age is an important factor to consider when purchasing life insurance. Today, we’re focused on ten-year term insurance. When does it make sense? Not everyone is the same. Other factors will also play an important role in deciding the length of your term insurance.
A ten-year term policy can often be the correct fit for individuals reaching retirement age. Your debts have most likely dropped down limiting the amount of coverage you need. Your kids are more than likely self-sufficient at this point. You may only need a small plan to cover remaining debts and make sure your spouse or loved ones can make it through a transition period.
We can also look at the opposite end of the age brackets. The younger and healthier an individual is, the more insurance they should lock up. Although, this doesn’t always fit. You may be in your early 20’s and have a tight budget after recently graduating and obtaining your degree. You haven’t started a family yet and have no dependents. What you do have is student loans piling up. This may be a situation where your budget doesn’t allow much more than a small ten-year term policy. In this situation, it is better to place a blanket over these obligations to protect your family from absorbing any of these debts.
Also, remember the rising price of premiums as you age. Just because you fit the bill discussed above, does not mean you should not consider rising premiums. Maybe extending the policy in the early years is the way to go for your budget. Just always remember, every year that passes, the next time around will not be as cheap. Most of the time, health is not currently in the same situation either.
What Is The Age of Your Dependents?
How many kids do you currently have? Is your spouse currently working? Are your kids getting ready to head off to college? These are important factors to consider when purchasing life insurance.
Often, the age of your dependents may be the perfect reason to buy a ten-year term insurance policy. If your kids are ages 0-5, this won’t make much sense. This would leave a gap in coverage where you still need to protect your kids in the event something happens. Let’s say your kids are ages 8-13, this may be a perfect fit.
I am not suggesting to only consider this factor in deciding. You should still speak to a licensed professional and go over your needs from start to finish.
However, if your dependents are that 8-13 age class, it makes sense to carry coverage right up to point where your dependents are becoming self-sufficient. Often, this is the age where kids are leaving for college or beginning a family of their own. If debts are low and your spouse has sufficient means if you were to expire, the ten-year term policy may be a perfect fit.
Are You The Sole Provider For Your family?
This topic can become much more complex. A ten-year policy may be the absolute smallest duration of coverage you should be carrying. With being the only income in your family, your income needs to continue when you are gone. The biggest reason a ten-year term policy may make sense in this situation is the size of the policy. The sole income providers may have to carry large life insurance policies; 1 million +. If you have investigated rates, you are aware that lengthening the duration on these policies gets pricey. It is possible to find one that fits your budget. Although, the coverage amount in these situations is crucial.
Your current income and lifestyle need the option of moving forward for your family; with or without you. You may find yourself in a situation where a ten-year policy makes sense. Maybe you are beginning the path of being the sole provider. Maybe your income is projecting to climb and you’re currently in a very healthy state. Maybe opting in for a short large policy could buy you time to consider a larger, longer policy in future years.
This could help your current budget and provide coverage that you need. Often, if it’s feasible to extend past the ten years, people still choose not to. This will only cost you more money down the road. Talk to a licensed professional to go over the options and weigh the pros and cons. A ten-year term life insurance policy can be a well-utilized tool. It can also be a strong piece of your financial security and future.
How Flexible is Your Budget?
This one is obvious but still important to cover. Your budget may be the sole and primary reason a ten-year term policy makes sense for you. Ten-year term policies will always be the lowest end option you can choose. As far as protection, it is equally as strong as any other option. It’s a shorter time frame of protection so it comes at a cheaper price. If you’re in a situation where money is not left over after obligations, do not ignore the protection. You should still be considering a ten-year term life insurance policy.
Almost all ten-year policies will have built-in options for converting to permanent insurance or renewing. Ten years is always going to be better than nothing. These policies are often very affordable; especially when navigating the market with an Independent Life Insurance Agent.
If budget is a concern, a ten-year policy will suffice, and you can re-evaluate options in the future. Duration will always be a bigger factor on price than the actual coverage amount will be. The idea here is, add up the debts you currently have and place the ten-year protection around them.
Take advantage of the perks that exist within a lot of these insurance policies. Understand them or gain clarity through your life insurance agent or financial professional. A ten-year term policy could be the igniter to your future coverage plans if executed correctly.
A policy structured to allow conversion and renewable options can fit in your budget today and have the option of restructuring later. Pick your policy carefully and gain clarity on your full plan. Look down your path further than if something happened tonight. Plan your policy and financial situation for the long term. Choosing a short duration on your term policy could be a perfect fit.
What Are You Protecting?
This is also self-explanatory but what you are protecting is a huge factor. Are you protecting a mortgage because other obligations are being taken care of? How long is remaining on the mortgage? A ten-year term life insurance policy could be a great fit if you are on the tail end of your mortgage payments. If you are coming up on those last ten years of payments, you can focus on getting a life insurance policy that will take you to the finish line. This will cut any burden or financial ruin that will be on your family if something happens to you.
Maybe you are protecting a short-term business obligation as discussed above. This could be another great ten-year term life insurance that makes sense. We could go on and on about this topic, but the main points are simple. Look at the situation. Ask yourself, what am I protecting? How long do I need the protection or when will this area of protection no longer be in need? How much do I need?
Is a 10 Year Term Life Insurance Policy Right for You?
In conclusion, all factors play a large factor in deciding what coverage is in need. A 10 year term life insurance policy still serves a viable fit for many situations. All situations need special attention and detail. You need to go over those five factors and break down your current situation. A strapped budget should rarely justify not carrying life insurance coverage. A budget can always have the option to be re-structured. It can also always focus on protecting your family and financial security. Many carriers offer these policies with strong future options. It can still prove to be a big piece of your financial puzzle. Life insurance carriers will allow you to convert to permanent insurance or extend at special intervals within the policy. A ten-year term policy may prove to be the most viable and suitable option for your life insurance.
Spectrum Insurance Group is made up of professional life insurance agents who are licensed in all 50 states and the District of Columbia. As principal licensed life insurance agent Bennett Bier has helped 1000’s of people purchase life insurance online & over the phone. During his career he has become the go to expert for securing hard to place term and permanent life insurance policies for clients across the nation. With his wealth of knowledge of each life insurance carrier’s products and underwriting he provides honest answers and advice to every client. Bennett Bier and his team will work tirelessly to successfully secure the coverage your family deserves.
All content on this site has been written by life insurance experts & licensed life insurance agents.