A quick refresher. Term life insurance is primarily used to replace lost income over a period of time. The length of term is half of the equation while the amount of protection is the other half. The length of term that choose is entirely dependent on your particular situation. As we discussed in the 5 year term life article, that is probably too short a period of time to cover traditional needs in case someone passes away. 10 years is approaching the sweet area. Let’s see what situations work well with 10 years of term life.

If you are purchasing life insurance (either additional or for the first time) with middle age children…say age 12 and 14, then 10 years may be ideal. 10 years of term should take you out to the point that both children have graduated for college. Getting children through early adulthood is a common concern that drives people to shop for term life insurance. 10 years might not be adequate if you have a new family with very young children but might ideally address a mid-life family.

Cost has a big impact in people choosing 10 years of term life and age is a primary driver of term life insurance rates. Again, the length of term and amount of protect act like a see-saw. If you want to keep the monthly premium at a certain amount you can lower the term length to increase the amount of protection and vice versa. If the amount of coverage is more important, some people will reduce the length of term and 10 years is usually the lowest length of time they are willing to go. This isn’t exactly a bad strategy…especially if your in your 40’s or 50’s and 10 years take you out almost to the Medicare.

10 year could also work if you are a good part through a family mortgage. If you have 10 years left, buying to 10 years of term addresses the ability to pay off the mortgage for your loved ones. For most families, the mortgage is the largest debt or monthly expense they face that is less flexible.

There are also some business uses for 10 year term. This length of term might be ideal with a new venture or business. Let’s face it, if your company can make it past 10 years than you are doing significantly better than the average. The most critical time is the initial start-up period and 10 years provides a cushion to insure that the loss of a critical person (also called key employee life insurance) does not wreck the company. The benefit can be used to find a replacement or float the company’s finances during such a tumultuous transition.

Keep in mind that if you choose 10 year term life and come to the end of the policy term, you would likely need to re-qualify based on health and the cost will be significantly higher at your older age. When you run your term life insurance instant quote, double-check 10 year versus the next step-up which is 15 years. Make sure there’s enough difference in pricing not to go with 15 years at the desired amount of life insurance.