The Cost of a 10 Year Term

Written by Strahan Financial Services

The Cost of a 10 Year Term

Many people will buy a less expensive 10-year term with the thought they will buy a new policy in the future. When you consider the potential cost of a 10-year term policy, this can be an expensive mistake. Time not only passes quickly, but financial responsibilities also change, and you find that you are now in a position where you have to replace the less expensive 10-year term. The real cost of a 10-year term ends up costing you more money in the long run, especially when term prices are so low.

It can be a  mistake buying a cheaper policy with the notion they will buy a new 10-year policy ten years later. The cost of a 10-year term may initially save money, but this strategy could leave you with insurance premiums that you cannot afford in the future.

Consider Changing Health Conditions

People take good health for granted. When you are young, it easy to qualify for preferred health discounts. However, as you grow older, changes in your health will risk your preferred health status. Health issues that you may think are relatively minor now can lead to higher premiums for new policies at a later date. “Preferred” health rates tend to deteriorate with age.

For example, it is not uncommon for people, as they grow older, to develop problems with blood pressure and high cholesterol.  Having these problems or even taking medication to control them can disqualify you from receiving the low premium you expected to qualify.

What if you develop a more serious medical problem? A severe medical problem can lead to policy premiums that increase with extra medical surcharges. Diabetes could easily double the premium a person pays for a new non-preferred policy. If a medical problem is bad enough, you could become what life insurance companies consider uninsurable, and you may not be able to buy a new policy.

Consider also the possibility of a disability. Accidents happen all the time to the most careful people. A disability can leave you in a position where you cannot qualify for the amount of insurance you need. The potential cost of a 10-year term plan can be more expensive than you ever considered! What if you develop sleep apnea? A medical condition will affect the rate along with other common issues.

The point is this, as you grow older adverse changes in your insurability can negatively impact what you pay for a new life insurance policy or may leave you unable to buy life insurance. A more extended level-premium period, which costs more, protects your current health status and insurability.

Consider the Impact of Aging

A factor that life insurance companies take into consideration is your height and weight.  Companies use height/weight tables to determine rates. A 25-year old may qualify for a “preferred rate,” now but people will add more weight with age. Most people will transition from preferred rated health status to the more expensive “standard” health status as they grow older. A standard rate is a rate most will qualify for in America.

When you purchase a longer level term period with a preferred health discount, such as a 30-year term policy, your preferred status is guaranteed and does not change during the 30 years. If you put on weight during the 30-year level term period, your premiums will remain unchanged.

But if you purchase a cheaper 10-year policy, with the idea of buying another 10-year policy at the end of 10 years, all health factors, including your weight, will be re-examined. We are not forever young. An adverse change could dramatically affect what you pay for a new policy. The potential cost of a 10-year term can be devastating if they have to replace it.

It is essential to lock in your preferred status longer by buying a more extended level period term. Take a careful look at a longer-term product such as a 20, 30, or even a 35-year term period. The real cost of a 10-year term policy can be much more than you ever expected!

Use An Independent Agency Rather Than a Captive Agent

A captive agent must offer you products from the company that has “captured” and contracted them to solicit insurance. A captive agent limits your choices of finding the best company at the best price, with the quickest turn around time. Also, be aware of many of the larger agencies that continuously advertise on the radio, which in reality only represent a handful of companies.

The key to finding the best life insurance quotes is to use an agency that represents multiple carriers. Strahan Financial Services works with the top best life insurance companies. Many of these companies have been around for a very long time are very well known and highly rated. We only use the top 1% of the 852 life insurance companies in the U.S.  Many use the accelerated underwriting process. Let us put our expertise to work for you.

about Strahan Financial Services

About Strahan Financial Services
About Strahan Financial Services

We work with individuals across the nation to secure the best life insurance rates.

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