Insertions/deletions are common evolutionary tools employed to alter the structural and functional repertoire of protein domains. An insert situated proximal to the active site or ligand binding site frequently impacts protein function; however, the effect of distal indels on protein activity and/or stability are often not studied. In this paper, we have investigated a distal insert, which influences the function and stability of a unique DNA polymerase, called terminal deoxynucleotidyl transferase (TdT). TdT (EC:22.214.171.124) is a monomeric 58 kDa protein belonging to family X of eukaryotic DNA polymerases and known for its role in V(D)J recombination as well as in non-homologous end-joining (NHEJ) pathways. Two murine isoforms of TdT, with a length difference of twenty residues and having different biochemical properties, have been studied. All-atom molecular dynamics simulations at different temperatures and interaction network analyses were performed on the short and long-length isoforms. We observed conformational changes in the regions distal to the insert position (thumb subdomain) in the longer isoform, which indirectly affects the activity and stability of the enzyme through a mediating loop (Loop1). A structural rationale could be provided to explain the reduced polymerization rate as well as increased thermosensitivity of the longer isoform caused by peripherally located length variations within a DNA polymerase. These observations increase our understanding of the roles of length variants in introducing functional diversity in protein families in general.