Last Updated: July 2020
Securing a $1 million dollar term life insurance policy is a lot easier and cheaper than you might think.
If you’re interested in seeing the cost, best companies, and how to apply for a $1 million life insurance policy, this article is for you.
- How Much Does a $1 Million Dollar Term Life Insurance Policy Cost?
- Why Purchase a $1 Million Life Insurance Policy?
- Qualifying for a Million Dollar Life Insurance Policy
- The Best Companies for a Million Dollar Term Life Insurance Policy
- Alternatives to a $1 Million Life Insurance Policy if it’s Too Expensive
- The Easiest Way To Apply for a $1 Million Life Insurance Policy
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
The cost of a $1 million dollar term life insurance policy depends on age, health, term length, and other factors. A healthy 50-year-old can get a policy for $101 per month for men, and $81 per month for women. The best companies include Banner Life, Protective, and Lincoln Financial.
When purchasing a million dollars or more of term life insurance, you’re literally purchasing coverage for pennies on the dollar to protect your family.
How Much Does a $1 Million Dollar Term Life Insurance Policy Cost?
The cost of a $1,000,000 life insurance policy will depend on a number of factors that we will cover below.
We encourage you to utilize our instant life insurance quote tool to compare $1 million dollar life insurance policies side by side.
Here are sample monthly rates for $1 million of coverage at a “preferred” health classification for a non-smoker. Life insurance for smokers or people with health issues will be more expensive.
$1 Million Policy Rates for Men
This table shows monthly rates for 10, 20, and 30-year term life insurance policies with a death benefit of $1,000,000 for men between 30 to 60 years old.
|Age||10 Year Term||20 Year Term||30 Year Term|
$1 Million Policy Rates for Women
The table below shows monthly rates for 10, 20, and 30-year term life insurance policies with a death benefit of $1,000,000 for women between 30 to 60 years old.
|Age||10 Year Term||20 Year Term||30 Year Term|
Factors Affecting the Cost of a Million Dollar Policy
When choosing your life insurance policy, you also need to consider the factors that may affect your rates and insurance premium payments.
- Age: This is one of the bigger deciding factors when it comes to life insurance. The older you are, the more difficult it is to find an affordable policy that offers the amount of insurance coverage you need with a decent monthly premium
- Health: Rates increase year after year, and if you have any health conditions, you will find much higher premiums than if you were in good health.
- Policy Term: Shorter policy terms will typically meet with lower premiums for insurance coverage. When the insurance term is shorter, it is less likely that the insurance company will have to pay out the death benefit on the policy before it expires.
- Size of the Policy: Some think that a million dollar policy is going to cost twice as much as a $500,000 policy, but this is not accurate. Larger policies typically come with lower premiums per thousand.
How Health Affects the Cost of Life Insurance
Your health and lifestyle will determine your rates more than anything else.
If you have any health issues, even minor ones like controlled blood pressure or cholesterol, you may pay slightly more.
Since each company will view your health and lifestyle differently, there’s no way for any life insurance consumer to know who will provide the best health rating for them. As life insurance agents representing these companies, we’re given field underwriting guidelines that let us know what rates you can qualify for. On top of that, we keep our own database of approvals, so we know which company provides the best rates in various situations.
How To Determine Your Health Class
Here is a simple guide to help determine your health class:
- Preferred Plus: No Health Issues or Medications
- Preferred: Controlled minor health issues (Cholesterol, Blood Pressure, Asthma, etc.)
- Standard Plus: Minor health issues
- Standard: Controlled health issues
As far as lifestyle goes (like private pilots, scuba divers, skydivers, etc.), it all depends on your experience and different risks associated with your lifestyle. We have an article on high-risk life insurance that explains our process.
Currently, if you’re in great health, you can qualify for a $1,000,000 of life insurance with no medical exam and receive a decision within 24 hours. This is an A+ rated carrier that’s very well known.
Contact us for details if you’re in great health. While our instant quotes are 100% accurate and kept up to date, they don’t factor in specific health situations.
Why Purchase a $1 Million Life Insurance Policy?
Many families where only one person is responsible for the primary household income purchase $1,000,000 in coverage, and sometimes even more.
When deciding how much life insurance you need, you have to consider what would happen to your loved ones if you passed away.
If, for example, you are the sole provider of income and have two young children, you may need to provide 15 or more years of support for your spouse and kids if you passed away.
When you consider school, bills, mortgages, and other expenses, it can add up to a lot of money.
If you didn’t have enough life insurance, it could leave your family with leftover bills and no money to pay off those expenses.
Today, for many families under 50, especially with young kids, a $1,000,000 policy is the right choice.
What A $1 Million Policy Can Help With
There are dozens of expenses that many people considering life insurance don’t think of. Here are several common ways people use life insurance.
- Final Expenses: These costs can include funeral costs, burial expenses, unpaid medical bills and expenses, and more.
- Health Insurance: Some people leave behind a mounting pile of medical bills. These bills include unpaid copayments, deductibles, and other coinsurance provisions.
- Income Replacement: Even with what is considered a modest income, your family may still require this kind of large policy after your death. Some experts say that you should have a life insurance policy in place that is greater than or equal to between 10 and 20 times your annual income.
Expert Tip: To determine what is best for your family and situation, multiply your annual income amount by the number of years your family will likely need to cover expenses.
- Home Costs: This could be a new home purchase, an existing home mortgage, or moving costs if the family relocates.
- College Tuition
- Car Payments
There are other contingencies you may also have to consider as well when deciding on getting a $1 million dollar insurance policy or not.
For example, is there another member of the family or an aging parent going to need long-term care and assistance? Are there properties that need to be taken care of following your passing?
Qualifying for a Million Dollar Life Insurance Policy
Depending on your age, you can qualify for up to 25 times your annual income. If you have special circumstances, you can qualify for even more.
This means that a person making $40,000 per year can qualify for $1,000,000 of term life insurance coverage just on income alone.
The cost for a 20-year term at $1 million dollars is very affordable at a $40,000 annual income as well, for those in good health.
The Best Companies for a Million Dollar Term Life Insurance Policy
Our experience has shown that some of the best rates for a $1 million dollar policy are from:
- Banner Life
- Protective Life Insurance Company
- Lincoln Financial
- Prudential Life Insurance
- Principal Life Insurance Company
- Minnesota Life Insurance
- American General
These are some of the best life insurance companies in the industry. However, it’s always best to work with an independent agent who knows your situation. If you are searching for life insurance for diabetics, for example, you may need a different company.
Fill out our instant quote tool, then give us a call to find the right policy for you!
Alternatives to a $1 Million Life Insurance Policy if it’s Too Expensive
If you’re looking at our quotes on the next screen and our million-dollar life insurance rates are too expensive, we suggest you look into “laddering” your coverage to lower the cost.
Laddering means you buy multiple smaller policies with different maturity dates (10, 15, 20, 30-year term, etc.) that custom tailor your needs rather than one large policy.
Doing so could lower the cost of your policy.
Here’s an example of laddering your life insurance.
Let’s say a $1,000,000 20-year term life insurance policy is out of your comfort range, but you need at least $1,000,000 of coverage for total peace of mind. You can purchase two policies instead.
- Purchase a $500,000, 10-year term policy.
- Purchase a $500,000, 20-year term policy.
This will be cheaper than the single million-dollar life insurance policy for 20 years. You’ll get the coverage you need for the next 10 years, and during that time frame, you can re-evaluate when your income increases or your situation changes.
This is a great strategy that many life insurance agents fail to recommend. So if the cost is too high for you when viewing quotes on our website, make sure you look into this laddering strategy.
Call us for help creating a laddering strategy that is best for you.
The Easiest Way To Apply for a $1 Million Life Insurance Policy
At Rootfin, we know the key to getting the best rate is finding the company that views your situation more favorably than others.
It’s best to use an experienced independent life insurance agent who knows your situation in detail. They will be able to tell you which companies will give you the lowest rates on a $1 million dollar term policy.
It could be one of the companies above or a different carrier altogether. Just be sure they’re a financially sound company, then choose the lowest rates and policy that fits your situation best.
Use our quote tool to compare dozens of life insurance companies and find the right million-dollar term life insurance policy for your needs.
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