Personalized Insurance Solutions, LLC

We have all seen the advertisements on TV showing the wonderful 10-year term rates. But is ten-year term a good idea or bad idea? It depends on the situation!

When is ten-year term a good idea? If the individual truly only needs the protection for ten years and there is no question that life insurance protection will never be needed after ten years, it can be the right move. For example, it may be the right solution when the individual’s youngest son or daughter is already eighteen years old, and life insurance on the parent is only needed until the youngest child completes college and other assets that are already accumulated will take care of the family after that.

When is ten-year term not a good idea? If one needs life insurance protection for longer than ten years, it is not a good idea to get ten-year term for the first ten years under the assumption that, when those first ten years are over, the individual can simply buy another ten-year term policy. The reason is this: the term policy bought ten years later will be at an older age and therefore a significantly higher premium. As a result, the combined premium for both term plans may wind up costing a lot more than if the individual had simply bought a twenty-year term policy at the outset. More importantly, the individual may develop a health problem during those first ten years that will make the individual uninsurable after that.

There is a lot to consider when purchasing life insurance. People’s needs change over time, and many people are often not even aware of the various needs for life insurance that may come up in the future.

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