Before you pay the new premium or cancel the policy, pull the table of guaranteed maximum renewal rates in the back of your contract and read the next five years, not just this year — the first post-level premium is not a one-time step up, it recalculates every year at your attained age and keeps climbing until the contract’s final expiry age. Deciding based on this year’s number alone is how people end up paying a fortune for coverage they will drop in eighteen months anyway.
What happened is structural, not a mistake. A 20-year level term policy charges an averaged premium across those twenty years — more than the true mortality cost in the early years, less in the later ones. When the level period ends, the averaging stops. The contract switches to annually renewable term priced on your current age, with no new underwriting and no health questions, which sounds generous until you see the rate for a 71-year-old.
A realistic example: $500,000 of 20-year level term issued to a healthy 50-year-old in 2006 at roughly $1,100 per year. At the first renewal in 2026, at age 70, the guaranteed rate on many contracts lands somewhere between $9,000 and $18,000 for the year — and roughly 20% to 30% higher again the following year.
In This Article
Why the Increase Is a Multiple, Not a Percentage
Three forces compound at the same moment.
Mortality cost rises geometrically after 65. The annual probability of death roughly doubles every seven to eight years in later life. A premium priced honestly against that curve has to move the same way. The 2017 Commissioners Standard Ordinary mortality table, which became the mandatory basis for new policies issued from January 1, 2020, reflects longer life expectancies than the 2001 CSO table it replaced — but the shape of the late-life curve is unchanged.
Level term is priced assuming almost nobody renews. Carriers set level term premiums expecting the overwhelming majority of policyholders to walk away at the end of the level period. Society of Actuaries studies of post-level term behavior have repeatedly documented shock lapse rates well above half of the block in the first post-level year, and often far higher when the premium jump is steep.
The people who stay are the ones who cannot get coverage elsewhere. This is anti-selection, and carriers price for it explicitly. Anyone healthy enough to buy new coverage does. Whoever remains is, as a group, in materially worse health than the block average, and the renewal rate has to cover that.
Put together, the renewal rate is not really a price for insurance on an average 70-year-old. It is a price for insurance on a 70-year-old who has a reason to keep an expensive policy — and the carrier knows it.
Read Your Contract, Not the Bill
Two numbers are in the policy and neither is on the premium notice.
The table of guaranteed maximum annual renewal premiums lists the highest rate the carrier may charge at each attained age through the end of the contract. Carriers frequently charge less than the guaranteed maximum in the first renewal year and then move toward it. Knowing the guaranteed path tells you what the worst case looks like in year three, which is the year most people are actually deciding about.
The final expiry age is the age at which renewal stops being available at any price. It is commonly 90 or 95 on older contracts. Coverage genuinely ends there; there is no further option.
Also check whether a conversion right still exists. On most contracts it expired years earlier — commonly at the earlier of a stated policy year or attained age 65 or 70 — but a minority run longer, and a live conversion right changes the entire analysis because it turns an expiring term policy into a permanent one with no medical exam. If yours is still open, stop reading and go handle it; see what to do when the conversion rider is about to expire.
One more contract feature worth confirming: some policies use a graded post-level structure with a smaller first-year step and larger increases later, rather than a single cliff. The total cost over five years can be similar; the decision point is just moved.
Every Alternative, Ranked for This Situation
1. Let it go. Stop paying, coverage ends, you receive nothing. This is the correct answer for the majority of people in this situation — specifically when nobody’s finances change materially at your death, the policy cannot be converted, and the renewal premium would come out of retirement income. There is no shame in it. Term insurance did its job for twenty years and then ended, which is exactly what you paid for.
2. Pay the renewal for a defined short bridge. Rational when you have a specific, dated need: a mortgage with four years left, a spouse who reaches full Social Security in two years, an estate settlement pending. Set the end date in advance and calendar it. Do not renew open-endedly.
3. Shop new coverage. Worth twenty minutes if you are in good health. A healthy 68-year-old can sometimes buy a new 10-year or 15-year term policy for less than the renewal rate on the old one. If your health has declined, this route generally closes.
4. Convert, if the right is still alive. No exam, priced at the original risk class. The right answer when coverage is still needed and the permanent premium is manageable, especially if health has declined.
5. Convert partially. Turn a slice of the face amount into permanent coverage at a fraction of the full premium and let the rest lapse.
6. Convert, then have the converted policy reviewed. If the coverage is no longer needed and the converted face amount is roughly $100,000 or more, a secondary-market review can produce cash where a lapsing term policy produces nothing. Read converting term and then selling.
| Path | Cost Trajectory | Coverage | Cash to You | Best When |
|---|---|---|---|---|
| Let it lapse | $0 | Ends | None | No one depends on the benefit |
| Pay annually renewable premium | Rises steeply every year to final expiry age | Continues | None | Short dated need, or impaired health |
| Buy new term | Level again for a new period | New policy | None | Good health, smaller amount needed |
| Convert (if right is alive) | Level permanent premium | Permanent | None | Coverage needed, health declined |
| Partial conversion | Proportionally lower | Smaller permanent policy | None | Some need, limited budget |
| Convert then request a review | Premium until closing | Ends at sale | Possible lump sum at $100,000+ face | Coverage not needed, impaired health |
When Selling Is Not the Answer
Be blunt about this, because a premium cliff makes people receptive to anyone promising money.
A term policy that cannot be converted has essentially no market value. Buyers need a contract that will still be in force when the insured dies, and a policy that expires at 90 with escalating annually renewable premiums in between is not something an institutional buyer will pay meaningfully for. Face amount does not change this. Health does not change this. If the conversion right is gone, the honest answer is that there is nothing to sell — see what an expiring term policy is worth.
A settlement is also not the answer when the converted face amount would fall below roughly $100,000, which is broadly the floor at which the market engages, or when the insured is in strong health for their age, because a long projected life expectancy means a buyer would pay escalating premiums for decades.
And it is not the answer when the coverage is still doing real work. If a surviving spouse’s household income drops by a third at your death, the death benefit — which generally passes free of income tax under Internal Revenue Code section 101(a) — is worth more than any lump sum a buyer would offer. Renew, convert, or replace, but do not sell the protection someone is counting on.
If you are not sure which category you are in, send the policy cover page and the rider schedule for a free, no-obligation review or call (305) 209-7183. Pine Lake Life Solutions provides educational information only and does not give legal, tax, or investment advice.
The Arithmetic Nobody Does
Run the five-year total cost, not the annual premium. On the $500,000 example, five years of renewal premiums escalating from roughly $9,000 might total $60,000 or more. Ask two questions against that number.
First, what is the probability the death benefit is actually paid in that window? For a 70-year-old in average health, it is low — which is precisely why the premium is affordable-looking relative to $500,000 and yet a poor use of $60,000. For a 70-year-old with a significant health impairment, the calculus inverts entirely, and renewing can be the single best financial decision available.
Second, what does the same money do elsewhere? Sixty thousand dollars of premium is a year of assisted living in much of the country, or a meaningful buffer against the sequence-of-returns risk in an early retirement. Insurance is not automatically the best use of a dollar just because it is insurance.
The honest general rule: the worse your health, the more the renewal premium is worth paying, and the more likely a converted policy has secondary-market value. The better your health, the more likely the right answer is to let the policy end and keep the money. That is the opposite of how most people feel about it, and it is why the decision deserves an afternoon rather than a reflex.
If cash flow is the binding constraint rather than the decision itself, read the options when premiums stop being affordable before you cancel anything, because a lapse is irreversible and a few of the alternatives are not.
A One-Week Checklist
Day one. Locate the policy. Find the declarations page, the rider schedule, and the table of guaranteed maximum renewal premiums. If you cannot find the contract, request a certified copy from the carrier — most will provide one within a couple of weeks, and some charge a small fee.
Day two. Call the carrier. Confirm four things in writing: the current renewal premium, the guaranteed maximum premium for the next five years, the final expiry age, and whether any conversion right remains and when it ends.
Day three. Decide who needs the death benefit and for how long. Write down the specific person and the specific dollar consequence. If you cannot name one, that is your answer.
Day four. If you are healthy, get two quotes on new coverage. If your health has declined and a conversion right exists, request conversion illustrations at full and reduced face amounts.
Day five. If the coverage is not needed and a conversion right exists, request a free policy review before you convert, so you are not paying a conversion premium on speculation.
Day six and seven. Confirm the grace period. Most contracts allow 31 days past the due date before coverage terminates, and some states require additional written notice. Know the exact date coverage ends, because everything above has to be finished before it.
Frequently Asked Questions
Why did my term premium multiply instead of increasing gradually?
The level premium averaged twenty years of mortality cost. When the level period ends, the contract switches to annually renewable term priced at your attained age, and late-life mortality cost rises steeply. Carriers also price renewals expecting mostly impaired policyholders to stay, which pushes the rate higher still.
Will the premium keep rising after this year?
Yes, every year until the contract’s final expiry age, commonly 90 or 95. The policy contains a table of guaranteed maximum renewal premiums by attained age. Read the next five years before deciding, because the second and third renewal years are usually what actually forces the decision.
Can I sell a term policy instead of paying the renewal?
Generally only if it can still be converted to permanent coverage. Buyers need a contract that will exist when the insured dies, so an unconvertible term policy has essentially no market value regardless of face amount. Check the rider schedule for a live conversion right before assuming either way.
Is buying a new policy cheaper than renewing?
Often, if you are in good health. A new ten or fifteen year term at 68 can cost less than the post-level renewal on the old policy, because the old policy’s renewal rate is priced for a pool of people who could not qualify elsewhere. It takes underwriting, so start early.
Do I have to answer health questions to renew?
No. Annually renewable term after the level period is a contractual continuation with no new underwriting, which is why the rate is high. That guaranteed renewability is genuinely valuable to someone whose health has declined and is close to worthless to someone who could pass underwriting today.
How long do I have before coverage actually ends?
Most contracts provide a grace period of 31 days after the premium due date, and many states require a separate written lapse notice with its own timing. Confirm the exact termination date with the carrier rather than assuming. Everything you might want to do has to happen before that date.
What if my conversion right expired years ago?
Then the realistic choices narrow to paying the escalating renewal premium as a short bridge or letting the coverage end. Ask the carrier in writing whether any conversion extension exists and keep the response. An unconvertible term policy generally has no secondary-market value, and any caller claiming otherwise should be verified carefully.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- Term Policy Expiring
- 30 Year Term Ending At 70
- Term Conversion Rider Expiring
- Convert Term Then Sell
- Sell Term Life Policy
- Cant Afford Life Insurance Premiums
- Term Policy No Cash Value Worth
- Premium Notice Doubled
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.