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 Policy
- Best Companies for Million Dollar Term Life Insurance
- What If a $1 Million Life Insurance Policy Is Too Expensive?
- The Easiest Way To Apply for a Million-Dollar Policy
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.
We’ve found that most people are surprised at how inexpensive a $1,000,000 term life insurance policy really is. And the reality is, more people are buying AT LEAST one million dollars of term life insurance than ever before.
Well, with the cost of living and education rising along with inflation – for younger families, a $1,000,000 term life insurance policy is a starting point for a breadwinner to adequately protect their loved ones.
How Much Does a 1 Million Dollar Term Life Insurance Policy Cost?
You might think that a $1,000,000 life insurance policy costs a lot; not so fast though. We encourage you to utilize our instant life insurance quote engine to compare 1 million dollar life insurance policies side by side.
Let’s look at some sample rates for $1 Million of coverage at a “preferred” health classification, non-smoker, and monthly rates. Rates as a smoker on life insurance coverage will see an increase in these rates.
Rates for Men
|Age||10 Year Term||20 Year Term||30 Year Term|
Rates for Women
|Age||10 Year Term||20 Year Term||30 Year Term|
Factors Affecting Insurance Costs
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 payout 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 that explains our process.
Currently, if you’re in great health, you can qualify for a $1,000,000 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
You may have thought, why would someone need that much life insurance? Well, if there is only one person responsible for the primary household income, and you have young children, the need is absolutely there.
You’re always looking for ways to protect your family from unforeseen circumstances.
So, you invest in IRAs and 401Ks, but have you thought about life insurance? It is the easiest way to provide for your dependents after death. Aside from having life insurance, it’s vital that you get enough coverage.
Not having enough life insurance is one of the worst mistakes that you can make. It would leave your family with leftover bills and no money to pay off those expenses. Before you purchase a life insurance plan, it’s vital that you calculate your life insurance needs.
Today, for many families under 50, especially with young kids, a $1,000,000 policy is the baseline of coverage they should get.
If you didn’t come home from work tomorrow…
- Who would provide for your loved ones?
- Would they be able to stay in the same house and maintain their current lifestyle?
A $1,000,000 20 year term life insurance policy could support your family until your children can provide for themselves.
The Policy can Help with Final Expenses
When it comes to wrapping up all your affairs, you need to consider the cost of all of the final expenses. These costs can include funeral costs, burial expenses, unpaid medical bills and expenses, and more.
Even with great health insurance, you will still more than likely leave behind a mounting pile of medical bills for your loved ones. These bills include unpaid copayments, deductibles, and other coinsurance provisions. All of this can ultimately add up to be in excess of thousands of dollars.
It Acts as Income Replacement
Even with what is considered a modest income, your family may still require this kind of large policy after your death. It is said that you should have a life insurance policy in place that is equal to if not greater than between 10 and 20 times your annual income.
To really 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. You will quickly find that a million-dollar insurance policy isn’t much of a reach.
It Can Cover Significant Costs Following Death
There are likely going to be other major expenses your family will have to face following your death as well including health insurance premiums for the family, the cost of a new home or existing home, college tuition, and a new vehicle. Often, families are seen relocating following a death in the family as a way to make meeting ends easier.
You may also want to pay off the mortgage on your home as well so it is one less thing you will have to worry about in the future and if you have children that were left behind, you want to make sure that they are taken care of when it comes to their college tuition.
Some Other Contingencies a Million Dollar Policy Helps with
Above is just a small list of what you may expect following the passing of a loved one. All of these financial obligations can begin to add up very quickly, and it can cause great financial strain on the family.
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 the passing?
Qualifying Financially for a Million Dollar Term 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.
For Example: 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
- Lincoln Financial
- Minnesota Life
- American General
*Note: Did you know that men typically choose more life insurance coverage than women do? It is said that the value of a man’s life insurance policy is usually 45% more than the average policy for a woman. For this reason, you will find that Banner Life may be the ideal solution for men. This insurance company targets the market for men’s policies.
Fill out our instant quote tool, then give us a call to find the right policy for you!
What If a $1 Million Life Insurance Policy is 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, GUL, etc.) that custom tailor your needs rather than one large policy.
Doing so could lower the cost of your policy.
For example: 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. Here’s where laddering can come into play.
Look into purchasing a $500,000 10 year term and a $500,000 20 year term as opposed to the single million-dollar life insurance policy. 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 very common strategy that most 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. We’ll be happy to recommend a laddering strategy that is best for you.
This is a great strategy for anyone that need a million dollars of coverage but can’t afford the policy. Luckily, these plans tend to be much more affordable than most applicants think. There are dozens of different factors that the insurance company is going to look at when they are calculating what your premiums are going to be for the life insurance policy.
The insurance company is going to calculate how much of a risk you are, the higher the risk, the more that you’ll pay for life insurance. If you want to get lower insurance rates, you’ll need to improve your health and eliminate any risky lifestyle habits that you have. This can help you save thousands of dollars on your life insurance policy.
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 Prudential, Banner Life, Protective, ING (now VOYA), MetLife, AIG, Minnesota Life, American National, or another company. Just be sure they’re a financially sound company, then choose the lowest rates and policy that fits you best.
Just because your friend secured the best rates with a certain company, it doesn’t mean that the same company is best for you.
Our quote tool has dozens of life insurance companies and will help you find the right million-dollar term life insurance policy for your needs.