Life insurance rates are based on age. A new policy will cost more because you are older now. Health issues will not affect an in-force policy, but could make it challenging to get a replacement policy.

Take time to evaluate existing policies. Do they provide term or permanent coverage? How do they compare to the replacement you are considering? Life insurance contracts typically have a two-year contestable clause. After two years the insurance company cannot contest or deny benefits except in cases of fraud or nonpayment. The replacement policy will have a new contestable period. If an existing insurance policy provides permanent coverage you may have cash value and borrowing options. It will take many years for a new policy to build comparable cash value. Some life contracts let owners take low interest loans (which must be paid back) against policy cash value. A replacement policy may not include this option or charge a higher interest rate. Ask about tax consequences as well as surrender fees for canceling an existing policy. Is there a fee for processing replacement coverage?

Consider converting or increasing coverage limits on an existing policy. Compare the cost of getting another small policy to supplement the in-force policies too.

If replacement is the best option, be certain the prospective life insurer is financially sound, has a good complaint record and is licensed to operate in Illinois. Keep existing coverage in place until the replacement policy arrives. Review the new contract right away to confirm it meets your expectations. You have twenty days from delivery to return it for a full refund.