What Is A 10 Year Term Insurance Policy?
A 10-year term insurance policy, like any other term plan, is a pure risk protection cover that offers assured financial security to your loved ones. To be eligible to receive these benefits, the life assured must have died during the policy term of 10 years. Further, all due premium payments have to be completed to receive the entire benefit amount without deductions.
Note that these policies do not come with maturity benefits; however, one can choose to add riders for enhancing the coverage of the base policy. Riders can range from accident, dismemberment, and disability benefits to critical illnesses and premium waiver benefits.
How Does A 10 Year Term Insurance Policy Work?
Such plans are fairly straightforward to understand. The following is a brief description of how these plans work.
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Based on your requirements, you assure a sum against your death with the insurer. There is usually a cap on the minimum amount that you can assure under a term insurance policy.
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Now, the insurer will factor in the sum assured, your age, income, and health risks to arrive at a premium amount. You are expected to pay the premium as per the premium payment term and the mode of payment chosen at policy inception.
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In exchange for this premium amount, the term plan will cover your life for 10 years. In the event of your unfortunate demise during the policy term (in this case, 10 years), your loved ones can raise a claim for the sum assured.
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After careful verification, the insurer pays out the benefit amount either as a lump sum or in installments. Your family can use these funds to finance future needs in your absence and maintain their quality of life.
Best 10 Year Term Life Insurance
The following table lists some of the best 10-year term insurance policies available to serve your financial obligations.
| Name of Policy |
Insurance Provider |
Minimum Sum Assured |
Maximum Sum Assured |
Premium Payment Term |
| HDFC Life Click 2 Protect |
HDFC Life |
Rs. 20 Lakhs |
No Limit |
Single Pay, Regular Pay, Limited Pay |
| Max Life Smart Term Plan |
Max Life |
Rs. 25 Lakhs |
No Limit |
Single Pay, Regular Pay, Limited Pay |
| ICICI Pru iProtect Smart |
ICICI Prudential |
Rs. 3 Lakhs (subject to minimum premium amount) |
No Limit |
Single Pay, Regular Pay, Limited Pay |
| Bajaj Allianz iSecure |
Bajaj Allianz |
Rs. 25 Lakhs |
Rs. 50 Lakhs |
Regular Pay, Limited Pay |
| SBI Life eShield Next |
SBI Life |
Rs. 50 Lakhs |
Non-Smokers: No Limit Smokers: Rs. 99 Lakhs |
Single Pay, Regular Pay, Limited Pay |
| Kotak e-Term Plan |
Kotak Life |
Rs. 25 Lakhs |
Life Plus Option: Rs. 1 Crore Other Options: No Limit |
Single Pay, Regular Pay, Limited Pay |
| LIC Tech Term |
LIC |
Rs. 50 Lakhs |
No Limit |
Single Pay, Regular Pay, Limited Pay |
* Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
Why Choose a 10 Year Term Life Insurance Policy?
There are several benefits associated with 10-year term insurance policies that might convince you to invest in one. These are:
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Short-Term Coverage - Long-term life insurance policies require you to pay premiums for as long as 25-30 years, depending on the policy tenure. If you are not one for long-term commitments, 10-year term life insurance should be a perfect place to start. It is a reasonable duration and is, therefore, fairly easy to plan and fulfill short-term obligations.
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Tax Deductions - You can claim deductions under Section 80C of the Income Tax Act, 1961 for the premiums paid towards your 10-year term policy.
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Surrender Benefit - Even if you wish to give up premium payments for your policy midway, you shall be entitled to surrender benefit, provided that at least 2-3 years’ premiums have been paid in full.
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Rider Protection - As mentioned earlier, these policies come with the provision to add riders that offer extra protection against accidental deaths, disability, critical illnesses, etc.
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Loan Facility - A few insurers offer 10-year term life insurance policies that come with the loan facility to serve various urgent liquidity needs against the sum assured.
How Are 10 Year Term Life Insurance Rates Calculated?
The insurance rates for 10-year term plans are calculated based on the following factors:
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Age of the policyholder
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Her/his annual income
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Chosen sum assured
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His/her medical history
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Tobacco usage, etc.
The insurance rates are mostly directly proportional to these factors. A smoker is always charged higher premiums owing to health risks he/she incur as a result of continued tobacco usage. Notably, most insurance providers feature online premium calculators on their websites that you can use for free to estimate the premiums payable for 10-year insurance coverage. Based on the estimated rates, you can choose from monthly, quarterly, half-yearly, or yearly premium payments per your budget.
Drawbacks Of Purchasing a 10 Year Term Insurance Policy?
Here are a few drawbacks of buying a 10-year term insurance policy:
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The only major drawback of purchasing a 10-year term policy is that you will have to apply for a new cover once the policy term ends.
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As already mentioned, 10-year term life insurance rates increase with age. Therefore, when you apply for a fresh policy after this period, you will be charged a significantly higher premium.
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Further, despite your 10-year coverage being exhaustive, on the off chance that you survive the policy term, you do not receive any benefits.
FAQ's
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Who should buy a 10-year term life insurance plan?
Ans. Such a plan is suitable for any individual looking to secure the financial future of their family in their absence. It can prove to be particularly beneficial for individuals who have certain short-term obligations to fulfill in the next 10 years. If they die during this period, their family can use the death benefit to fund these expenses. Individuals with responsibilities such as house loans, child education, marriage, might want to consider 10-year plans such as these.
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What if the policyholder dies after the expiry of 10 years?
Ans. Term plans with a policy term of 10 years do not cover death occurring after this period. If the policyholder dies after the expiry of the policy term, nominees shall not be paid any death benefit.
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Who is eligible to purchase 10-year term insurance plans?
Ans. Term insurance can be bought by individuals in the age bracket of 18 to 65 years. Note that the eligibility conditions and benefits offered under such plans vary across insurers. Further, you should note that the premium amounts increase as you grow older due to the possibility of age-related health risks. Therefore, it is advisable to invest in one as early as possible.
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What if I forget to pay premiums for my term plan?
Ans. Insurers usually offer a grace period of 15 to 30 days from the date of the first unpaid premium to resume premium payments without affecting the assured benefits. Post this period, you shall have to revive your policy before the end of the policy term to enjoy the benefits. Revival of lapsed policies will cost you interest on the premium amount.
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Do premiums for a 10-year term insurance policy increase every year?
Ans. If you have bought a level term insurance policy, your premiums are most likely to remain constant throughout the policy term of 10 years. However, small changes are possible and are done at the discretion of the insurance provider.
