A term life insurance plan can last for a fixed period, meaning it can expire, but you typically get the most coverage per dollar paid in premiums. One term life policy option is 10-year term life insurance. This policy provides coverage for a decade. Knowing how it works can be vital to picking the right life insurance policy for your needs. Let’s dive deeper into 10-year term life insurance, what happens when it expires, and some situations where a 10-year life policy can make sense.
10-year term life insurance is a type of term life insurance that expires 10 years after you obtain the policy. If you pass away during the policy term, the insurer pays your loved ones a death benefit useful for helping with loss of income, paying off debts, and saving for the future. Talk to an Aflac agent about rates and your options. Keep in mind that premiums can also vary by your insurer, health, smoking status, occupation, and lifestyle.
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A 10-year term life insurance policy expires after the 10-year term length ends. If you don’t pass away during this period, your coverage ends. This means that if you pass away afterward, your beneficiaries won’t receive a death benefit. For example, if you got a 10-year term life insurance policy on January 1, 2023, it would expire on January 1, 2033.
If your 10-year term life insurance policy is expiring soon, you have a few options to continue coverage:
Many term life insurance policies come with renewal riders. These let you renew your policy to extend coverage without taking a new medical exam. However, premiums will increase since you’ll be older than when you first got the policy. When you renew a 10-year term life insurance policy, you will get the same term length of 10 years.
Some policyholders may decide they want lifelong coverage when their term life insurance ends. If your 10-year term life insurance policy has a conversion rider, you can convert it to a permanent life plan with no medical exam.
Additionally, a permanent plan gives you access to a cash value growth component. Every time you pay premiums, your insurer puts funds into your cash value, where it grows tax-deferred based on the policy type. For example, whole life insurance cash value grows at a fixed, guaranteed rate. You can then borrow or withdraw from your cash value when you accumulate enough. Your insurer will pay your cash value to you minus surrender charges if you surrender the policy. Keep in mind that premiums may increase significantly since permanent life insurance policies cost more than term life insurance, and you’ll be older.
If your policy has already expired, or you don’t have access to a renewal or conversion rider, you can apply for a new term or permanent life insurance policy. However, a new traditional life insurance policy may require a new medical exam.
Alternatively, you can get a no-exam policy, like final expense insurance, to skip the medical exam. Final expense insurance is designed to help cover end-of-life costs, such as funeral expenses and medical bills. As a result, these plans typically have small death benefits, lower premiums, lifelong coverage, and cash value. Aflac offers final expense insurance that fits most budgets and no medical exam.
Getting a 10-year term life insurance can make sense for people in the following situations:
10-year term life insurance can be a good option to help protect your children as they grow. Premiums are typically low, and if you pass away, your partner can use the death benefit to help with loss of income, pay off your debts, and pay for your children’s education. Then, the policy expires once your children leave the house. That way, you can stop paying premiums when you no longer need the policy.
If you pass away with debt, your estate may be used to pay those debts off. This can leave less for your heirs. As a result, people who take on long-term debt may get a 10-year term life insurance policy. Beneficiaries can use the death benefit to help pay off the debt if the policyholder passes away, allowing them to keep more wealth in the family. Plus, they can use the remaining death benefit amount however they please.
Term life insurance plans typically cost less than permanent life insurance.3 Additionally, 10-year term life insurance’s short-term length makes it one of the lowest-cost term life insurance options. Therefore, people who want less expensive coverage may want to consider this type of plan.
People approaching retirement may still have dependents that rely on their income or debts to pay off, such as a mortgage. A 10-year term life insurance policy can help protect their beneficiaries if they pass away early. Furthermore, loved ones can use some of the death benefit proceeds to help pay for the policyholder’s funeral, travel expenses to the funeral, and other end-of-life costs.
10-year term life insurance may last for a shorter time than other policies, but it can also get you an enhanced death benefit for some of the lowest premiums among all policy types. Plus, you may be able to renew your policy, convert it to a permanent life insurance policy, or get a new policy when it expires. This can make 10-year term life insurance excellent for families with growing children, people with short-term debts, policyholders who need less expensive coverage, and people approaching retirement. If you believe this type of coverage fits your needs, chat with an Aflac agent today to learn more about our 10-year term life insurance policies.
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1 Forbes – Best Term Life Insurance 2023. https://www.forbes.com/advisor/l/best-term-life-insurance/. Accessed May 18, 2023.
2 Forbes – What is 10-Year Term Life Insurance? Updated October 4, 2022. https://www.forbes.com/advisor/life-insurance/10-year-term-life-insurance/. Accessed May 18, 2023.
3 Forbes – Term vs. Permanent Life Insurance: What’s the Difference? Updated March 8, 2023. https://www.forbes.com/advisor/life-insurance/term-vs-permanent-life-insurance/. Accessed May 18, 2023.
Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.
Coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, coverage is underwritten by American Family Life Assurance Company of New York.
68000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. In New York, NY68100-NY68400.65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma, Oregon, Pennsylvania, Texas, & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma, Pennsylvania, Texas, & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series: Whole: In Arkansas, Delaware & Oregon, Policy Q60100M. In Idaho Policy Q60100MID. In Oklahoma, Policy Q60100MOK. In Texas, Policy Q60100MTX.Q60000 series: Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Oregon, Texas, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C.
Final Expense insurance coverage is underwritten by Tier One Insurance Company. The life insurance policy described herein contains an optional Accelerated Death Benefits Rider that is intended for favorable tax treatment under Section 101(g) of the Internal Revenue Code. Aflac does not give legal or tax advice. Please consult with a qualified legal, tax, and accounting advisor before engaging in any transaction. In AR, AZ, ID, OK, OR, PA, TX and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).
This is a brief product overview only. Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations and exclusions. For complete details, including availability and costs, please contact your local Aflac agent.
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