Understanding 10 Year Term Insurance Plans
Putting your family first is an approach taken by many when they want their spouse, parents, or children to live secure lives without hardships. But can you shield your loved ones from everything? From a practical viewpoint, it is not possible. So, while you can’t shield your family from every problem, big and small, it does not mean you cannot do anything to protect them. One way to offer financial protection to your family is by getting a life coverage for yourself. One of the affordable life insurance policies is a 10-year term insurance plan.
Any person looking for their family to be financially secure and empowered to face any dire circumstances should know about 10-year term life insurance plans. But before we dive into the meaning of 10-year term life insurance, let’s understand what term life insurance is.
What are Term Life Plans?
As with any life insurance policy, a term insurance plan is a contract between the policyholder and the insurance provider. It is initiated when the policyholder makes a policy purchase. The policyholder maintains the policy by paying premiums to the insurer. In return, the insurer offers certain benefits to the policyholder. These benefits are policy-specific. The sum assured is the benefit you can enjoy as a policyholder.
If something unfortunate were to happen to you during the policy term, the nominee can claim compensation. This compensation is given in the form of a death benefit. This amount depends on the sum assured under the policy purchased by you. The policyholder may also choose to nominate multiple people as nominees of the benefits.
Pure term life insurance plans are simple in design. They primarily offer only a death benefit and no maturity benefits. The simple design is said to keep the plan costs lower, making term insurance one of the affordable life insurance plans available in the market today.
You may opt for these plans to ensure your family’s financial future is secure, whether or not you are there with them. You can also buy these plans if you have any liabilities that you would not want to burden your family with.
Now, what is 10-year term life insurance? Let’s dive in.
What is 10-year Term Life Insurance?
10-year term life insurance plans, like the name suggests, offer life protection cover for 10 years. If you use a term insurance premium calculator, you can set the plan duration to 10 years. Input your desired sum assured and the premium payment frequency. The premiums will be computed accordingly.
Now, after gaining clarity on the meaning of 10-year term life insurance, you must be wondering –
- Is 10 years long or short?
- How do you look at buying a 10-year term insurance policy?
- Why should you consider this option?
Why Buy 10-Year Term Insurance?
10-year term life insurance plans can be purchased for offering financial security to your loved ones, without having to burden yourself with heavy premium costs during the premium payment term.
You can buy such a policy as your primary life cover. On the other hand, you can also use it to cover any liabilities. For example, imagine you have taken a vehicle loan, home loan, or any such loan that you are expecting to pay off in the next five to ten years.
If something were to happen to you in the next few years, the burden of the loan would fall on your family. A 10-year term life insurance policy may help save the situation during the policy term.
Such a policy can also be suitable for people with higher age group, who are closer to retirement or have already retired. Some of you may still need to support your loved ones and may need the policy to help with the same. A term plan for a decade may suit your needs depending on various factors. Premium rates may be higher for older people. It is advisable to use the term insurance premium calculator before making the policy purchase to get an estimate of the probable premium amount.
It may also be suitable for younger individuals who want financial security and also want insurance plan’s costs to be affordable. They may then, according to their needs, switch to a policy offering more features.
A 10-year term insurance policy is one of the many variations of term life policies available today. If you are considering trying these plans but aren’t sure about them, you may consult an insurance advisor or an insurance agent.
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