What will happen when a ten years renewable term life insurance policy issued at age 45 is renewed?

When a ten-year renewable term life insurance policy is renewed, the premium rate will be adjusted based on the insured's current age at the time of renewal. Since the individual who originally took out the policy was 45 years old, upon renewal at the end of the term, they will now be considered as a 55-year-old for the purposes of underwriting the policy. This means that the premium charged will be the current rate applicable for a ten-year term insurance policy for someone who is now 55 years old.

This adjustment reflects the increased risk associated with age, as older insureds generally are considered higher risk due to the possibility of health issues or mortality rising with age. Therefore, the renewal premium will not remain the same, nor will it decrease, as the pricing aligns with the increased risk profile according to age-related actuarial tables. Additionally, the rate is not based on a whole life policy, which operates under a different structure and premium calculation.

The correct understanding is that renewals will always reflect the new age of the insured and current market rates for the specific term policy, which is precisely why the premium rate will be the rate applicable at age 55.