Will a Bypass Wreck Your Life Insurance Rate?

Dear Insurance Adviser,

Five years ago, when my husband was 71, we took out a life insurance policy. We were interested in 10-year term life insurance, but the agent quoted us a price for five years with a renewable option after five years, which would not be dependent on my husband's health.

The agent told us that the premium would probably go up. But, although we saw a chart showing that there was a possibility of a huge increase, he assured us that this figure was unrealistic and that the increase would be small.

Last month, he tried to sell us an annuity and asked how my husband's health has been since he last saw us. After he repeated the question, I felt I had to tell him that my husband had had a coronary bypass but that the cardiologist was very pleased with his present condition. The agent then informed us that our premium would probably triple. What can we do?

-Susan

Dear Susan,

I think the agent is mistaken. You should get your renewal at reasonable rates without any request for health history.

You've had a renewable five-year term life insurance policy. The premiums are fixed for the first five years but are not guaranteed for the second five years. When an insurance company runs a proposal on this kind of policy, you are shown both the projected rate and the maximum guaranteed rate, which is significantly higher than projected rates.

Whatever the rate ends up being, any change to the health of the insured cannot be a factor. Your now-76-year-old husband is guaranteed to pay the same rate as any other 76-year-old man insured by the company.

The rate for the next five years should come pretty close to the projected rate. I recommend that you take a wait-and-see approach.

If you do get a request for medical history prior to the renewal, contact the insurance commissioner's office in your state for help.

Good luck.

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