Suppose spouse1 and spouse2, aged 55, and children aged 17 and 19. Both spouses purchased 20-year term life insurance 19 years ago. The insurance is no longer needed to support either spouse or children in the event of a spouses's death.
The bill for the 20th year has arrived. The question is whether to pay it. This looks like a lottery ticket question: pay a small amount, usually win nothing, and very occasionally win big. In this particular case, the premium is $175 and the payout is $250,000. $175/$250,000 = 0.07%. So if a spouse's probability of dying in the next year is greater than 0.07% then it probably makes sense to pay the premium for that spouse. One can use data from the CDC to estimate the probability of death and thereby make some kind of reasoned choice about whether to pay the final year's premium.
It's usually the times when my logic feels airtight that I am mistaken. Is my analysis correct?