Objective We propose a new method to measure health inequalities caused by conditions amenable to policy intervention and use this to identify health differences between sexes and age groups. Methods The lowest observed mortality rates are used as a proxy of unavoidable mortality risks to develop a new measure of health outcome – realization of potential life years (RePLY). The RePLY distribution is used to measure avoidable health inequalities between sex and age groups respectively. Findings Using RePLY we find that even those countries with very high life expectancy at birth can have substantial health inequalities across different age groups. Also, gender inequality is more pronounced among those aged < 30. Among countries with a life expectancy < 60 years, there is a much larger prevalence of gender inequality against females; countries with life expectancy > 60 years have comparable numbers of cases of inequality among females and males. Finally, high avoidable health inequality is associated with low average income, high income inequality and high population fractionalization. Conclusion It is important to distinguish between unavoidable and avoidable mortality when measuring health outcomes and their distribution in society. The proposed new measure (RePLY) enables policy-makers to focus on age-sex groups with low realization of potential life years and thus high avoidable mortality risks.