Age, health, and the term insurance gap

As we get older, most of us see changes in our health. It’s just part of life.

But if you’ve had a health event since you bought your term life policy, getting a new term policy will probably be a lot more expensive, if not impossible.


It’s math: The higher the chance we will die during the term, the sooner the insurance company may need to pay our beneficiaries, so the more we have to pay in premiums

Say you own a $1,000,000 term insurance policy that you purchased when you were healthy, at a class called “Preferred Non-Smoker” and have been paying $7,000 a year. Now you’re 69 years old, and your health has declined. You’re now rated a “Table 6.” Table 6 isn’t terrible – statistically speaking, you’re not in trouble. On average, you have about a 15 year life expectancy. Still, because of this change, you may be required to pay more than $32,000 a year for a new term life policy.

That’s a huge leap to make, and most people don’t take it.


Next: The life insurance conversion gap