10-Pay Life Insurance: Definition, Benefits, And Other Detailed Information

Death is something certain but we never know when it comes. Death often emerges as a new problem for the abandoned family such as an economic issue. Many people try to guarantee their abandoned’s survival like their spouse and kids by joining life insurance. 10-pay life insurance is one of the life insurance with a limited installment period. It includes the whole life insurance by over 10 annual installment terms.

Do you have this kind of life insurance? It can be said all people need it as a form of their love for their family. The beneficiaries will be guaranteed their survival by receiving money each month. Nowadays, numerous insurers offer life insurance both limited and permanent payments. You should be careful and investigate them properly before deciding to join one of them. Let’s check this kind of limited-pay life insurance with ten annual installments.


The Definition Of 10-Pay Life Insurance

10-pay life insurance is a limited pay life insurance to apply for a limited premium level. The insurer requires the client to pay the premium in over 10 annual installments. The premium payment can stop at your retirement age. By following this kind of life insurance, the named beneficiaries will get the money as their additional income sources. So, they can use it to cover their monthly family expenses after your death.

10 Pay Life Insurance


Besides, getting the death benefits protection permanently and a cash value growth, it still offers 5 other advantages.  It is such as below:


Provide guaranteed level premiums

The insured can get payment from the insurer after paying more than 10 annual premiums. It implies the company does not need to wait for you for a day to pay some of the money. However, it is your right to take it or save it for your family.


Guarantee lifetime coverage

As long as you have a responsibility to pay the premiums, your coverage cannot be stopped. On the other hand, the police loans cannot exceed the cash entirely.


Cash value accumulation based on tax-deferred

There is cash value accumulation each year inside your insurance plan. It turns out it is accumulated based on the tax-deferred. The 10-pay life insurance allows withdrawal and takes the advantage of the policy loans some necessaries. It is such as to add requirement income, big purchase payments, and so on.


Policy dividends

The insurance policy may also be responsible to pay your dividends.


Life benefits

You can get the money after 10 installments or over, it does not matter to use it. You may take it as a portion of the death benefit for your medical expenses. Hence, the payment is just for you with chronic illness, terminal illness, or other specified medical conditions.


It Resembles Like Whole Life Insurance

The 10-pay life insurance resembles the whole life insurance type but the payment requirement is not permanent. Meanwhile, the whole life insurance is permanent insurance which has some similar policies.

Both must pay some cash to the beneficiaries after the insured dies. The policyholder also has the right to lend the cash value of the policy. It is because the policy as well builds up a tax-deferred cash value over the life of the insured.


Life Insurance Calculator

When joining the life insurance policy, you should understand the life insurance calculator. It is a way to know what you need or figure out your coverage needs. Here, you can use it or ask for the insurer’s help. If you want to try it alone, do it by entering your yearly income.

Next, calculate how many years your dependents will need financial support. Besides that, enter your debts, funeral needs, savings, future college costs, and other life insurance coverage. After entering the data, you will immediately get the results.

By the way, there are 3 tips to calculate your life insurance needs:

Figure out the right life insurance type for you

Not all life insurance suits you because of some reason. You might suit with the short-term life insurance with a 10-years installment because it will not burden your life.


The short-term insurance policy may make sense for you because it does not make you pay it permanently. You may not pay your mortgage until your kids go to college.


Consider other life insurance type

Consider other life insurances offered in your workplace. They may offer permanent or short-term types such as the 10-pay life insurance. Usually, it is offered by a group and given at no cost. The insurer will give your coverage after living your job but it comes as the limited death benefits.


Think other life insurance benefits

You may consider other benefits of life insurance because of an accident. It will pay your death benefits to cover your terminally ill after getting an accident.


How Does The Term Life Insurance Work?

How Does The Term Life Insurance Work


This kind of term life insurance with 10 annual installments works by involving death benefits and premium. The death benefits or face value is the amount of money for the beneficiaries identified as a guarantee after the insured died. The insurance policy can pay the fund to the beneficiaries such as their children. It can be used to cover their education fees or other needs. However, the beneficiaries must fulfill the qualification like health, age, and any hazardous activities.

Premium is the amount of money paid to the insurer by the policyholder for the insurance. Despite this, the insurer must pay some money as the death benefits if the policyholder pays the premium based on the requirement.

However, the insurance policy will pay the death benefits according to the life expectancy. Meanwhile, the life expectancy of the policyholder is influenced by some factors.  It includes the insured’s gender, age, high-risk hobbies, medical history, and occupational hazards. In addition, the premium paid is used for paying the insurance company’s operating expenses.


Essential Things affecting your life Insurance Costs and Premium

The premiums and costs of life insurance like the short-term pay life insurance is affected by some essential things:

  • Age

It is mentioned as the most important factor in life expectancy because it becomes the biggest risk determinant for the insurer.

  • Smoking

Smoking becomes one of the factors influencing the premiums and costs. The premium may increase because smokers have at risk for many health issues. Smoking can shorten life.

  • Gender

The premium level to pay is different for women and men through the age is similar. Seemly, the insurer thinks that women statistically live longer than men. So, the premium level rate for women is lower than for men.

  • Lifestyle

Besides gender, the policyholder’s lifestyle can increase the premium and insurance costs. It may happen when the insured has a dangerous lifestyle.

  • Driving record

The insurer policy also asks for your driving record to determine how much you must pay your premium. Usually, they ask for it to figure out your history of drunk driving or moving violations.

  • Health

Your medical exam is seen to know your health condition related to the risk of death. The life insurance company needs to know whether you have cancer, heart illness, diabetes, or others.

  • Family medical record

Lastly, the 10-pay life insurance asks for your family’s medical record to know whether they have issues or not. The family medical record will prove that your risk to get your current condition is higher than your immediate family.


People Who Need the Life Insurance

People Who Need the Life Insurance


There are a lot of criteria that belong to need life insurance, it does not matter the type of it. Here are the people who should join the life insurance both term and permanent:

  • Parents with minor children

How do the destiny of the minor children when their parents die? It is difficult to imagine if it happens while they do not earn income alone. The insurance policy will guarantee their life until they are adults and earn money alone.

  • Parents with special-needs adult children

The case is almost similar to the previous point but the special needs adult kids cannot be independent forever. Usually, they need a special need trust after their parents die. The death benefits can be used for funding it by giving the money to a fiduciary to cover their adult child benefits.

  • Senior

Caring for an elderly parent needs much time until the children must sacrifice their work. Of course, they need a guarantee to cover their parents’ needs or to help reimburse the adult child’s costs after the parent passes away

  • Adult with property together

Life insurance can be an ideal idea for people both married and single to finish property together issue. An adult might married or engaged and then buy their first house or others. Life insurance is useful to pay the property taxes, and loan payment, until upkeeps if one of them dies.

  • Young adult or children wants to get the low rate

For your information, life insurance applies the lower premium rates based on age. The young adult or children under 20 years old with the healthy condition might buy a policy without having dependents. But, it is as long as there is an expectation to have them in the future.

  • Young adults with parents who have the loan for them

Next, life insurance is needed by parents with private student loans. It is also ruled for those who have signed up the loan agreement for the young adult educational fees. Life insurance helps to pay off the debt when the parents die.

  • Stay-at-home spouse

The life insurance must be owned by a stay-at-home spouse because they have significant economic value-based. It is according to what they do as a job at home.

  • A wealthy family with real estate taxes

It can provide funds to keep the full value of the estate intact and to cover the taxes.

  • A family cannot pay the funeral expenses

The 10-pay life insurance is useful to pay for and honor a loved one’s passing.

  • Business with the main employees

A main or key employee is such as a CEO must have the life insurance. The fund is useful to buy an insurable interest to save the company financial hardship.

  • Married pensioners

The retired people can use some of their retirement payments to buy the life insurance for their spouses and children.

  • People with health issues

Lastly, people with health issues like diabetes, cancer, heart illness, and much more need life insurance so much. The funds are useful to cover the cost of care, treatment, funeral costs, and others.


Final Words

The 10-pay life insurance including limited or short-term insurance involves premiums and costs. It has a lot of benefits for the insured dies and the named beneficiaries. Figure out this kind of life insurance properly before deciding to join. However, this insurance does not too burden you much because the fund can be taken after the payment of more than ten years of installment.

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